legs 


OPXLIBRIS 


The  Pack-Asses 
of  Privilege 


BY 

PHILIP  W.  FRANCIS 


PORTLAND,   OREGON 

Published  by  the  Author 

1911 


'7* 


Copyrifht,  1911.  by  Philip  W.  Francis 


•USHONa  t  CO.,  FINHTIRB,  MKTIANO,  0*. 


Knowing  this,  that  never  yet 
Share  of  Truth  was  vainly  set 

In  the  world's  wide  fallow; 
After  hands  shall  sow  the  seed, 
After  hands  from   hill   and   mead 

Reap    the    harvests   yellow. 

— Whittier. 


265461 


To  THE  DEAR  CHUM 

Whose  invincible  cheerfulness,  loyalty, 
helpfulness  and  faith  have  made  this  work 
possible,  this  book  is  affectionately  dedi- 
cated by  her  husband. 


Introduction 

|T  is  doubtless  true  that  the  contrasts  of  society  to- 
day are  neither  so  bold  nor  so  distressing  as  the 
contrasts  of  society  in  other  times.  Nowhere  in 
the  United  States,  certainly,  is  there  such  ignorance 
or  such  poverty  as  we  know  to  have  been  common  to  the 
working  masses  during  the  many  centuries  that  elapsed 
from  the  fall  of  the  Roman  civilization  to  the  destruction  of 
feudalism  by  the  beneficent  invention  of  gunpowder.  That 
the  conditions  of  human  life,  in  the  mass,  have  steadily 
grown  easier  and  happier,  and  with  constantly  accelerated 
rapidity  during  the  last  hundred  years  or  so,  is,  I  think,  un- 
deniable. That  this  happy  progress  has  been,  and  will  con- 
tinue to  be,  the  work  of  evolutionary,  and  not  of  revolution- 
ary forces  is,  I  think,  also  undeniable.  If  I  read  history 
aright,  evolution  is  no  less  the  fixed  law  of  social  progress 
than  of  physical  progress.  The  common  good  steadily 
moves  forward  to  the  common  better,  impelled  by  a  multitude 
of  interacting  forces.  We  cannot  ever  all  at  once  obtain  the 
common  best  by  suddenly  turning  social  conditions  upside- 
down.  The  law  of  substantial  betterment  is  the  law  of 
growth,  of  ripening,  of  infinite  small  graftings  on  the  elder 
trunk.  Seed-time  and  harvest  will  not  be  coerced  to  fall  on 
a  day.  He  that  would  reap  must  sow  and  bide  in  patience 


6  INTRODUCTION 

for  the  crop.  First  the  blade,  then  the  ear,  and  then  the  full 
corn  in  the  ear — that  is  the  law  of  the  physical  universe,  by 
operation  of  which  we  have  ascended  from  mere  protoplasmic 
beginnings  to  our  high,  intellectual  estate,  and  that  is  the  law 
of  the  social  and  economic  world,  without  doubt. 

This  is  the  true  optimism,  that  sees  the  good  which  is, 
and  strives  with  might  and  main  to  better  that  good,  as 
well  as  the  bad  which  also  is.  A  cheerful  acquiescence  in  all 
that  society  is  and  does — in  all  its  traditions,  laws,  customs 
and  habits — is  as  stupid  and  harmful  as  the  unreasonable 
discontent  which  can  see  no  good  nor  any  happiness  in  the 
world.  The  ultra-conservative  and  the  ultra-radical  are  both 
fools  after  their  degree. 

Yet  while  the  conditions  of  society  have  improved  and 
do  improve;  while  the  rich  distribute  their  riches  as  never 
did  rich  men  before;  while  on  every  hand  libraries  and 
schools  and  hospitals  abound  for  the  use  of  all;  while  hun- 
dreds of  men  daily  put  the  lure  of  ease  and  gain  behind 
them  and  toil  for  humanity's  sake  in  the  fields  of  medicine, 
sanitation  and  scientific  research  of  every  kind ;  while  the 
workman  lies  softer  and  feeds  more  delicately  than  did  kings 
and  nobles  three  hundred  years  ago;  and  while  many  millions 
of  men  and  women  and  children  in  this  land  of  ours  are 
comfortable  and  happy,  it  needs  no  argument  to  prove  that 
comfort  and  happiness  are  not  shared  as  equitably  as  they 
should  be.  The  total  wealth  produced  yearly  by  the  people 
of  the  United  States  is  a  gigantic  mass.  We  have  run  far 
ahead  of  other  nations  in  the  race  for  wealth,  nor  does  our 
speed  slacken.  The  imperative  problem  to  which  we  must 


INTRODUCTION  7 

address  our  attention  is  the  more  equitable  distribution  of 
wealth  thus  created  among  the  creators.  Every  useful  effort 
toward  the  solution  of  this  problem  is  a  distinct  addition  to 
the  sum  of  human  happiness.  It  is  in  the  lively  hope  of  solv- 
ing one  part — and  that  by  no  means  the  least  part — of  this 
complex  problem  that  I  put  forth  this  book.  That  this  book 
contains  a  great  economic  truth,  which  has  singularly  enough 
been  overlooked,  I  feel  sure.  That  this  truth  will  win  its 
way  and  sometime  and  somehow  work  greatly  for  the  com- 
fort and  happiness  of  my  countrymen,  I  do  firmly  believe. 

It  is  my  part  to  sow  the  seed  of  this  new  doctrine. 
What  the  reaping  will  be,  I  cannot  tell.  The  future  is  always 
on  the  knees  of  the  gods.  Yet,  looking  ahead  to  times  to 
come,  hope  sees  wide  fields,  yellow  with  full  harvests,  and 
the  reapers  bringing  in  their  sheaves  with  rejoicing. 


The  Unrecognized  Law 

|AN  is  naturally  a  gregarious  animal,  and  civilized 
man,  with  his  instinctive  desire  for  the  company  of 
his  fellows  strengthened  by  ages  of  custom,  always 
seeks  association.  The  necessity  of  mutual  defense 
against  numerous  enemies  would  alone,  probably,  account  for 
the  foundation  of  cities  and  towns,  if  there  were  no  other 
cause.  And  the  gregarious  instinct  would  have  resulted  in 
the  founding  of  municipalities,  had  there  been  no  necessity  of 
defense.  But  the  sites  of  considerable  towns  and  cities,  from 
the  most  remote  times,  were  selected  by  force  of  the  one 
circumstance  that  controls  the  fortunes  of  communities  always 
— the  circumstance  of  cheaper  transportation  of  goods.  It 
matters  not  whether  the  price  of  transportation  was  paid  in 
labor,  or  in  barter  of  goods,  or  in  money-tokens;  whether 
the  task  was  hauling  wine  and  oil  and  sesame  and  millet  to 
Nineveh  or  Babylon  by  boat,  pack-ass  or  man-power,  or 
whether  it  was  hauling  the  ore  of  the  Mesaba  Range  to  the 
furnaces  of  Pittsburg — the  one  certain  determining  factor 
in  the  foundation  and  the  growth  or  decay  of  all  communities, 
great  or  small,  has  always  been  and  is  now  the  factor  of 
ease  or  difficulty — cheapness  or  dearness — of  transporting 
goods.  Wherever  cities  have  been  built  at  strategic  points 
commanding  cheap  access  to  considerable  portions  of  the 
globe,  neither  siege  nor  sack  nor  the  fall  of  empires  nor 
the  attacks  of  Time  have  been  able  to  shake  them  from  their 


IO  THE  UNRECOGNIZED  LAW 

seats  of  opulence  and  power.  On  the  other  hand,  let  but 
little  easier  and  cheaper  routes  of  trade  be  opened  by  a  rival 
community  and  neither  public  spirit,  nor  tradition  and  custom, 
nor  the  spending  of  toil  and  treasure,  can  avert  the  sure 
decay  of  growth  and  power  within  the  walls  of  the  once  vig- 
orous mart.  Doubtless  there  are  other  factors  of  growth  and 
decay,  but  the  cost  of  transportation  is  the  one  sole,  dominant, 
never-absent,  decisive  umpire  of  communal  life  or  death. 
Bearing  in  mind  man's  racial  necessity  of  living  a  communal 
life,  and  the  absolute  dependence  of  the  prosperity  of  each 
community  upon  transportation  cost,  we  will  soon  perceive 
clearly  that  every  conceivable  condition  of  society,  every  ef- 
fort of  man's  powers — nay,  the  very  fibers  and  atoms,  even, 
of  his  physical  and  intellectual  being — are  profoundly 
affected  by  this  controlling  factor  of  civilized  society.  It  is 
the  sap  in  the  tree,  the  blood  in  the  body.  No  empire,  nor 
Charlemagne's  nor  Napoleon's,  is  ever  great  enough  to  dis- 
obey its  decrees.  No  huddle  of  savages  in  an  African  kraal 
is  insignificant  enough  to  escape  its  vigilance.  By  its  com- 
manding hand  are  writ  the  destinies  of  kingdoms  and  of  men, 
the  fortunes  of  a  captain-general  of  commerce,  supplying  a 
hemisphere  with  oil  and  copper  and  steel,  and  the  fortunes 
of  the  peanut-vender  counting  his  handful  of  pennies  at  the 
co<rner  of  the  street.  It  is  the  Genius  of  Human  Society. 

This  generation  has  seen  a  wonderful  change  in  the 
methods  of  wealth  production — a  revolution  in  all  the  tradi- 
tions and  habits  of  trade  and  commerce.  The  prophet,  priest 
and  conquering  king  of  this  revolution  is  yet  living.  How 
much  the  progress  of  the  race  owes  to  the  powerful  intel- 


THE  UNRECOGNIZED  LAW  1 1 

lect  and  enormous  activities  of  John  D.  Rockefeller,  no  man 
can  say.  But  the  debt  is  huge.  Whether  he  was  actuated  by 
?elfish  motives  or  by  public  spirit,  whether  the  means  he 
chose  were  always  good  or  often  bad,  whether  his  profits 
have  been  too  great  and  his  possessions  too*  enormous — these 
things  are  nothing  here  to  the  point.  What  he  has  achieved, 
regardless  of  his  motives  or  means,  is  the  establishment,  in 
great  part,  of  the  business  of  producing  wealth  with  the 
greatest  possible  economy  of  effort.  He  is  the  Apostle  of 
Organization.  He  has  taught  men  to  combine  their  forces. 
It  is  useless  to  shut  our  eyes  to-  accomplished  facts.  And 
we  may  as  well  expect  to  see  the  world  return  to  the  days 
of  stage  coaches  and  weekly  mails  as  to  see  it  return  to  the 
commercial  methods  of  fifty  years  ago.  It  is  significant  of 
the  practical  character  of  Rockefeller's  genius  that  he  early 
perceived  and  never  lost  sight  of  the  dominant,  all-powerful 
influence  of  transportation  cost.  On  that  foundation-stone 
rests  his  huge  personal  fortune,  which  is  a  transient  thing 
to  be  blown  away  with  the  storms  of  two  or  three  genera- 
tions, and  also  rests  his  enormously  useful  work  of  reorgan- 
izing the  methods  of  wealth  production — the  utility  of  which, 
enforcing  imitation  by  the  example  of  his  stupendous  per- 
sonal success,  will  continue  to  promote  the  comfort  and  hap- 
piness of  millions  of  men  when  the  brooding  brain  and  the 
executing  hand  of  this  remarkable  man  have  been  dust  in  the 
winds  of  centuries. 

Now,  while  it  is  certain  that  the  civilized  world  has  in 
the  last  half-century  improved  its  methods  of  wealth-produc- 
tion to  a  degree  greater  than  all  the  improvements  achieved 


12  THE  UNRECOGNIZED  LAW 

by  the  wit  of  men  during  five  thousand  years  of  history,  it  is 
equally  certain  that  mankind  is  using  in  the  work  of  wealth 
distribution  the  same  methods  that  generations  dead  em- 
ployed. And  as  the  mass  of  wealth  produced  by  civilized  man 
is  enormously  greater  than  it  once  was,  so  the  inequalities  and 
injustices  of  the  methods  of  distribution  are  more  clearly 
apparent.  A  private  fortune  of  five  hundred  millions  pro- 
vides an  illumination  against  which  the  silhouettes  of  ragged 
and  hungry  and  suffering  men  and  women  and  children  loom 
large,  with  added  blackness  of  comparison.  Out  of  this 
contrast  grows  a  natural,  though  seldom  rational,  discon- 
tent and  anger.  Men  see  the  wrong  and  cast  about  for  the 
means  wherewith  to  right  it.  Hence  the  Anarchist,  with 
his  theory  of  no  law  save  the  individual  will,  and  of  no  wealth 
in  hand  save  that  which  the  individual  can  hold  by  the  con- 
sent of  all  the  stronger.  Hence  the  Socialist,  with  his  theory 
of  a  millennium  of  machines,  alike  of  iron  and  steel  and  flesh 
and  blood.  Hence  the  muck-raker,  seeing  no  farther  than  the 
end  of  his  nose,  and  often  justly  indignant  with  what  he 
there  sees;  doing  some  good,  at  times,  but  in  the  essentials 
of  his  methods  and  results  imitating  the  physician  who  should 
treat  with  salves  and  lotions  the  eruptions  of  smallpox  and 
neglect  altogether  to  prescribe  for  the  pestilence  in  the  blood. 
And  hence,  too,  a  constantly  increased  mass  of  proposed  and 
actual  legislation,  the  pitiable  inefficiency  of  most  of  which 
is  evidenced  by  the  fact  that  with  every  passing  season  there 
is  clamor  for  new  laws  to  check  the  evils  growing  out  of  those 
in  force.  It  is  very  evident  that  there  is  an  underlying 
general  law  of  economics  whose  energies  we  have  not  har- 


THE  UNRECOGNIZED  LAW  13 

nessed  to  the  service  of  the  common  good,  and  which  is  so 
powerful  that  it  sets  aside  all  the  efforts  making  for  justice  in 
wealth  distribution. 

This  powerful  and  resistless  law  is  the  law  of  the  cost 
of  transportation,  which  decrees  that  inequalities  in  that  cost 
shall  be  reflected,  with  increasing  force,  in  every  other  trans- 
action of  society ;  which  decrees  that  the  inequality  of  a  penn}' 
advantage  in  the  cost  of  moving  ten  pounds  of  freight  shall 
result  in  the  inequality  of  one  acre  of  land  selling  for  a  mil- 
lion dollars  and  another  selling  for  ten  dollars ;  which  decrees 
that  every  inequality  in  transportation  cost  shall  be  faithfully 
enlarged  in  an  inequality  of  the  grand  division  of  produced 
wealth  between  producing  Capital  and  Labor,  on  the  one 
hand,  and  non-producing  but  toll-gathering  Privilege  on  the 
other  hand ;  and  which  further  decrees  that  every  advantage 
of  inequality  in  transportation  cost  shall  go  to  the  gain  of 
Privilege  and  every  disadvantage  shall  be  to  the  loss  of  Capi- 
tal and  Labor  engaged  in  production.  When  this  truth  is 
once  firmly  in  hand,  the  problem  of  fair  and  economical  dis- 
tribution of  wealth  is  easy  of  solution. 

Granted  the  premises,  and  there  remains  but  this  con- 
clusion : 

That  if  society  does  away  with  all  inequalities  in  the  cost 
of  transportation  of  wealth-products,  it  will  by  this  same  act 
do  away  with  the  increasing  ensuing  inequalities  in  land 
values  and  the  consequent  everywhere  increasing  power  of 
Privilege  to  exact  more  toll  from  the  joint  production  of 
employed  Capital  and  Labor. 

Translated  into  other  terms,  this  means  the  opening  of 


14  THE  UNRECOGNIZED  LAW 

thousands  of  doors  of  opportunity  now  kept  shut  by  specula- 
tive Privilege;  the  employment  of  all  available  Capital  and  all 
available  Labor  at  higher  wages  for  both,  a  huge  increase  in 
the  production  of  wealth  and  a  very  general  diffusion  of  this 
increase  among  the  producers,  a  long  era  of  profitable  trade 
activities,  low  land  values,  low  rents,  high  interest,  high 
wages  and  wide  prosperity.  And  while,  as  a  corollary,  many 
huge  fortunes  would  be  greatly  reduced  in  bulk  with  the 
destruction  of  so  much  of  the  power  of  Privilege,  on  the  other 
hand  it  is  certain  that  most,  and  I  believe  all  of  the  invol- 
untary and  undeserved  Poverty  which  waits  on  Privilege 
would  disappear.  If  fewer  diamonds  glittered  in  the  palace, 
more  coals,  on  the  other  hand,  would  glow  in  the  tenement 
grates.  While  Mr.  Astor's  rent-roll  might  be  cut  in  half, 
many  thousands  of  workingmen  in  New  York,  as  another 
result,  would  have  more  money  left  in  their  purses  at  the 
month's  end. 

It  is  useless  to  flinch  from  the  logic  of  the  problem.  If 
the  distribution  of  the  total  wealth  production  is  now  unfair, 
then  some  are  getting  too  large  and  some  too  small  a  share. 
If  the  removal  of  inequalities  in  the  cost  of  transporting 
wealth  will  bring  about  an  approximately  fair  distribution 
of  the  total  wealth  produced,  then  those  now  getting  too  large 
shares  will  get  less,  and  those  getting  too  small  shares  will 
get  more.  The  theory  of  economic  distribution  now  presented 
has  neither  any  vindictiveness  towards  the  master  of  Privi- 
lege nor  any  sentimental  feeling  for  the  servant  of  Poverty. 
It  stands  for  something  higher  than  either  anger  or  pity. 

It  stands  for  Justice. 


The  Solution  of  the  Problem 

|HE  solution  of  the  problem  of  fair  distribution  of 
wealth  among  the  wealth  producers  which  I  have 
to  offer  is  this: 


Compel  all  common  carriers,  by  law',  to  transport  to  and 
from  all  railroad  points  and  ports  of  call  for  vessels,  within 
the  boundaries  of  the  United  States,  like  goods  and  commod- 
ities, of  like  bulk  and  weight,  for  a  like  charge,  irrespective 
of  length  of  haul. 

That  is  to  say,  for  example,  that  while  the  common  car- 
riers may  charge  more  for  transporting  a  ton  of  wheat  than 
a  ton  of  coal,  they  shall  not  charge  either  less  or  more  for 
transporting  a  ton  of  wheat  ten  miles  or  a  thousand  miles,  and 
so  with  every  other  class  of  goods  and  commodities.  I  shall 
call  this  the  Law  of  the  Common  Rate  and  hereafter,  in  the 
course  of  this  argument,  for  convenience's  sake,  simply  the 
Common  Rate. 

This  is  a  radical  and  innovating  proposal  which  I 
make  and  involves  changes  in  the  economic  order  more  mo- 
mentous than  any  mere  readjustment  of  freight  tariffs.  I 
shall  endeavor  to  prove  that  with  the  Common  Rate  in 
operation  land  values  would  tend  automatically  to  permanent 
equalization ;  that  both  the  "unearned  increment"  and  the  new 
wealth  daily  created  by  the  activities  of  Capital  and  Labor 
would  be  automatically  distributed  fairly  among  the  wealth 
producers;  that  high  speculative  land  values  and  high  rents 
in  cities  would  fall  and  that  the  earning  capacities  in  small 


1 6  THE  SOLUTION  OF  THE  PROBLEM 

towns  and  farming  communities  would  be  greatly  increased ; 
that  the  congestion  and  undue  pressure  of  population  at 
certain  points  would  be  done  away  with,  checking  the 
injuriously  rapid  growth  of  the  great  cities  to  the  benefit  of 
the  whole  country ;  that  an  immense  number  of  agricultural, 
mining  and  manufacturing  opportunities  would  be  automat- 
ically thrown  open  for  the  profitable  employment  of  Capital 
and  Labor,  thus  increasing  interest  and  wages  at  the  expense 
of  idle  speculative  capital  and  rent,  and  enormously  adding  to 
the  national  stock  of  usable  wealth ;  and  that  a  general  lower* 
ing  of  the  cost  of  living  and  a  general  increase  of  the  profits 
of  Capital  and  Labor  actually  engaged  in  producing  wealth 
would  take  place  all  over  the  country,  and  that  this  seeming 
paradox  would  be  automatically  accomplished  by  the  destruc- 
tion of  high  speculative  selling  and  rental  values  of  land 
at  favored  points,  by  bringing  the  products  of  all  Capital  and 
Labor  exerted  on  land  into  all  markets  on  equal  terms.  This 
is  an  ambitious  program.  I  trust  I  shall  not  fail  in  carrying 
it  out. 

Since  this  argument  is  addressed  to  the  plain  people,  and 
not  to  the  doctrinaires,  I  shall  take  no  nice  pains  with  the 
use  of  economic  terms.  The  meat  of  the  nut  is  the  thing  to 
be  got  at.  How  the  shell  is  cracked  is  a  matter  of  small 
moment.  Yet  for  a  proper  understanding  of  the  argument, 
it  is  necessary  to  state  some  of  the  definitions  and  axioms 
of  Political  Economy,  and  this  I  shall  do  as  briefly  and 
plainly  as  I  can. 

Labor  is  the  exertion  of  men's  powers,  mental  or 
physical. 


THE  SOLUTION  OF  THE  PROBLEM  I  ^ 

Capital  is  saved  wealth. 

Wealth  is  any  desirable  thing  produced  by  the  exertion 
of  Capital  and  Labor  upon  Land. 

Land  is  the  earth — its  soil,  minerals,  waters,  air,  vege- 
tation— all  the  raw  material  of  the  globe  on  which  we  live. 

The  share  of  the  wealth  produced  that  Capital  gets  is 
called  Interest. 

The  share  of  the  wealth  produced  that  Labor  gets  is 
called  Wages. 

The  share  of  the  wealth  produced  which  Capital  and 
Labor  must  pay  for  the  privilege  of  exerting  themselves  on 
Land  is  called  Rent. 

The  source  of  all  human  Comfort  and  happiness  is 
wealth.  Religion,  literature,  the  sciences,  the  arts,  the 
homely  necessities  of  daily  living,  all  are  dependent  upon  the 
constant  production  of  wealth,  since  without  wealth  there 
would  not  only  be  no  human  enjoyment,  but  not  even  human 
life.  Every  individual  has  wealth  in  some  quantity.  The 
paper  upon  which  I  write  is  wealth.  So  is  the  lead  pencil 
I  am  using.  If  it  be  only  a  club  with  which  to  kill  game 
or  to  beat  his  enemy,  still  the  most  destitute  savage  has 
wealth  of  a  kind.  Excessive  accumulation  of  wealth  by  an 
individual  may  not  add  to  his  happiness  and  may  multiply 
his  sorrows.  But  where  wealth  is  distributed  in  some  sort 
among  many  individuals  composing  a  society,  then  the  more 
wealth  that  society  possesses  the  more  comfortable  and  happy 
will  its  members  be.  The  more  houses,  furniture,  factories, 
railroads,  telegraphs,  breadstuffs,  meats,  fruits,  delicacies  and 
wealth  of  such  kind  a  community  has,  the  better  will  its 


1 8  THE  SOLUTION  OF  THE  PROBLEM 

members  be  sheltered,  clothed  and  fed,  and  the  healthier  and 
happier  they  will  be.  The  more  bibles,  hymn-books,  church 
publications  and  church  buildings  and  like  wealth  a  com- 
munity has,  the  happier  will  its  religious  folk  be.  The  more 
libraries,  books,  magazines,  newspapers,  colleges,  schools, 
theaters,  paintings,  sculptures,  music  and  the  like  wealth 
a  community  has,  the  more  happy  will  its  intellectual  folk  be. 
Of  course,  in  asserting  wealth  to  be  the  source  of  all  human 
happiness,  I  use  the  term  in  its  economic  sense.  It  is  common 
to  restrict  the  word  to  meaning  only  great  riches;  or,  worse 
yet,  much  money.  So  is  understanding  darkened. 

Now,  it  is  only  wealth  in  use  that  affords  happiness. 
The  consumption  of  wealth  is  not  only  a  necessity  of  life, 
but  it  is  also  a  performance  vitally  useful  to  the  promotion 
of  human  happiness.  We  once  had,  and  perhaps  have  still, 
a  school  of  economists  who  attempted  to  serve  mankind,  after 
their  lights,  by  teaching  them  how  to  live  with  less  variety 
of  food  and  with  less  of  many  other  comforts  and  luxuries. 
It  is  hard  to  contemplate  such  stupidity  with  tolerance.  The 
most  desirable  thing  for  any  community  of  men  is  the  desire 
for  more  comforts,  more  luxuries,  more  spending,  more  con- 
sumption and  the  power  to  gratify  this  desire  by  more  profit- 
able production.  No  man  lives  too  comfortably,  too  lux- 
uriously. The  trouble  is  that  too  many  do  not  and  cannot 
live  comfortably  and  luxuriously  enough.  Wealth  consump- 
tion— not  destruction — is  as  useful  a  performance  as  pro- 
duction. "There  is  he  that  scattereth  and  bringeth  increase," 
says  the  Book.  Idle  wealth  is  unprofitable  wealth.  Nations 
should  spend  wisely  to  get  wisely.  Dynamic  wealth,  wealth 


THE  SOLUTION  OF  THE  PROBLEM  1 9 

in  motion,  in  use,  in  process  of  exchange  and  transformation 
— that  is  the  source  of  comfort  and  of  more  wealth. 

It  follows  that  the  fairest  distribution  to  Capital  and 
T.abor  of  the  wealth  they  create  jointly  will  result  in  the  most 
widely  diffused  consumption  of  wealth  and  the  consequent 
most  widely  diffused  happiness  possible,  among  the  greatest 
possible  number  of  persons — and  this,  I  take  it,  is  the  only 
true  function  and  sole  end  of  government  and  society. 

It  is  practically  certain  that  in  a  country  where  Capital 
and  Labor  are  so  balanced  in  power  and  intelligence  as  they 
are  in  the  United  States,  where  the  organizing  and  executive 
abilities  of  a  Rockefeller  and  a  Carnegie  are  faced  by  the 
executive  and  organizing  abilities  of  a  Gompers  and  a  Mitch- 
ell, and  where  the  final  appeal  of  great  issues  is  not  to  sole 
Caesar  but  to  many  ballot  boxes — in  such  a  country,  I  say,  it  is 
practically  certain  that  in  the  long  run  the  gains  of  joint 
effort  would  be  pretty  fairly  divided  between  producing 
Capital  and  Labor,  if  these  two  alone  were  concerned  in  the 
division.  Before  approaching  the  consideration  of  this,  as 
well  as  of  other  present  day  problems,  it  is  well  to  rid  one's 
self  of  many  of  the  conceptions  of  current  economic  doctrine, 
because  these  dry-as-dust  theories  are  built  upon  imagined 
conditions  of  life  that  now  do  not  exist,  if,  indeed,  they  ever 
had  any  existence  outside  the  study-walls  of  the  amiable 
gentlemen  who  formulated  them.  At  any  rate,  the  most  care- 
less observer  knows  that  we  live  in  a  world  totally  different 
from  that  inhabited  by  our  ancestors  a  hundred  years  ago. 
And  yet  one  can  hardly  fail  to  be  struck  by  the  unvarying 
tendency  of  the  text-book  writers  to  plow  the  same  old 


2O  THE  SOLUTION  OF  THE  PROBLE(M 

ground,  garner  the  same  old  straw,  thresh  out  the  same  old 
chaff  of  terms  and  definitions.  We  are  called  upon  to  per- 
petually renew  our  acquaintance  with  the  same  five  tailors 
who  must  make  the  same  five  coats  for  the  same  five  sheep- 
raisers,  and  other  gentlemen  equally  ancient  and  equally  over- 
worked. And  as  a  result  of  this  curious  dwelling  in  an  abstract 
world  of  primitive  conditions,  we  find  the  Statics  of  Wealth 
discussed  in  ponderous  volumes,  and  the  really  live,  momentous 
questions  of  the  Dynamics  of  Wealth — the  laws  of  move- 
ment, distribution,  consumption — dismissed  with  a  vague 
paragraph  or  not  touched  at  all,  or  else  treated  of  in  an 
academic  manner  that  has  no  earthly  interest  for  the  plain 
man  of  the  farm,  the  shop  or  the  street.  Hence,  probably, 
the  vast  and  wandering  ignorance  of  our  political  news- 
papers and  men.  Hence,  too,  probably,  that  late  exhibition 
of  lofty  intelligence  evidenced  by  the  Congress  of  the  United 
States  in  undertaking  to  make  two  blades  of  grass  grow 
where  but  one  grew  before  by  building  a  higher  fence 
around  the  pasture  lot.  We  shall  now  see  how  little  able 
the  chief  economic  doctrinaires  have  been  to  recognize  the 
source  of  the  power  of  Rent  to  levy  increasing  toll  on  the 
industry  of  Capital  and  Labor. 

The  theory  enunciated  by  Anderson,  made  more  widely 
known  by  Ricardo,  and  echoed  by  their  disciples  ever  since, 
is  that  the  amount  of  this  toll  which  can  be  certainly  taken 
is  measured  by  the  difference  in  the  productivity  o<f  land.  One 
would  not  be  far  wrong,  taking  the  economists  at  their  own 
word,  in  designating  this  as  the  Fertility  Theory.  Now,  of 
course,  in  a  very  broad  sense  this  theory  is  sound.  But  the 


THE  SOLUTION  OF  THE  PROBLEM  2 1 

underlying,  basic,  unnoticed  truth,  which  is  hardly  dignified 
by  ten  lines  of  mention  in  as  many  bulky  volumes,  is  that 
the  amount  of  this  toll  which  can  be  taken  from  Capital  and 
Labor  is  gauged  by  the  differences  in  the  cost  of  transporta- 
tion to  market.  I  am  well  aware  that  the  text-book  au- 
thorities recognize  the  cost  of  transportation  as  something 
to  be  eliminated  before  reckoning  final  productive  capacity, 
but  if  there  is  one  who  at  all  recognizes  the  dominating, 
overwhelming  power  of  this  chief  factor,  as  everywhere  ex- 
emplified in  these  times  of  rapid  freight  transit,  my  reading 
has  failed  to  acquaint  me  with  his  name  or  work. 

The  one  sole  thing  which  takes  from  Capital  and 
Labor  so  large  a  portion  of  the  wealth  they  create  is  Privilege 
— the  ownership  of  portions  of  the  earth's  surface  artificially 
made  so  necessary  and  valuable  to  Capital  and  Labor  that 
they  are  willing  to  pay  high  rent  for  the  use  of  them — such, 
for  instance,  as  lands  in  New  York  or  Chicago — and  the 
artificial  value  which  commands  this  toll  from  Capital  and 
Labor  is1  primarily  always  produced  by  favorable  transporta- 
tion rates.  The  first  half  of  this  truth  has  been  iterated 
and  reiterated  until  well-informed  boys  of  grammar  school 
age  understand  it.  The  second  half  seems  not  to  have  been 
recognized  at  all — and  it  is  really  the  most  important.  It  is 
this  robbery  of  Labor  and  Capital,  and  not  the  robbery  of 
either  Capital  or  Labor,  one  by  the  other,  that  causes  the 
grossly  unfair  distribution  of  the  billions  of  wealth  yearly 
created  in  the  United  States  by  the  joint  industry  of  Capital 
and  Labor.  This  is  the  fundamental  cause  oof  the  higher 
cost  of  living.  The  public  mind  continually  confuses  this 


22  THE  SOLUTION  OF  THE  PROBLEM 

ownership  of  opportunity,  this  privilege  of  private  taxation, 
with  the  identity  of  Capital,  and  seeing  so  much  indefensible 
inequality  of  fortunes,  is  confirmed  in  the  conviction  that 
Capital  is  continually  robbing  Labor,  and  that  the  two  are, 
as  Marx  teaches,  natural  enemies;  whereas  nothing  is  more 
certain  than  that  they  are  natural  allies — nay,  twin  brethren 
— each  wholly  dependent  on  the  other  for  its  own  greatest 
good.  The  real  truth  is  that  Rent,  when  nursed  to  its  full 
strength  by  favorable  transporation  rates,  yokes  both  Capital 
and  Labor  in  its  service  and  allows  to  both  simply  the  slave's 
wage  of  subsistence. 

Even  a  dull  man  can  surely  understand  that  a  nation  of 
ninety  millions  produces  only  so  much  wealth  in  any  given 
time;  that  the  more  of  this  product  Capital  and  Labor  have 
to  pay  for  the  privilege  of  producing  it,  the  less  they  will 
have  to  divide;  and  that  since  the  share  of  Capital,  in  spite 
of  theory,  has  become  a  fixed  rate  instead  of  a  widely  fluctuat- 
ing quantity,  the  excess  of  the  toll  taken  by  Privilege  will 
fall  most  heavily  on  Labor.  That  this  is  the  actual  con- 
dition, our  eyes  and  ears  tell  us,  and  hence  it  can,  with 
confidence,  be  predicted  that  if  we  do  away  with  the  ex- 
cessive toll  levied  by  Privilege,  in  the  shape  of  high  speculative 
selling  and  rental  values  of  land  in  certain  restricted  districts, 
we  shall,  to  a  large  extent,  increase  the  gains  of  Capital  and 
to  a  larger  extent  increase  the  gains  of  Labor — and  by  Labor 
I  mean  the  useful  productive  work  of  all  men — farmers, 
merchants,  miners,  mechanics,  clerks,  doctors,  dentists,  per- 
haps a  few  lawyers — all  who  perform  useful  functions  in  the 
great  scheme  of  our  complex  social  life. 


The  Common  Rate  and  Land  Values 

|F  in  the  absence  of  any  Constitutional  prohibition, 
the  Congress  were  to  enact  and  the  President  were 
to  begin  to  put  into  execution  a  law  providing 
that  two 'billion  dollars  of  taxes  should  be  raised 
annually  in  the  United  States,  and  that  this  should  be  done 
by  a  system  of  graduated  income  taxation,  falling  lightest 
on  tho<se  best  able  to  pay,  heavier  on  those  next  best  able  to 
pay  and  so  on  down  the  line  until  the  heaviest  impost  of  all 
fell  upon  those  the  least  able  of  all  to  pay,  it  is  probable  that 
armed  insurrection  would  be  only  so  long  in  coming  as  it 
took  for  the  people  to  reach  for  their  guns. 

And  yet  this  monstrous  thing  is  done  every  year,  and — 
such  is  the  force  of  ancient  use  and  habit — done  not  only 
with  no  objection,  but  with  unanimous  approval. 

If  we  use  the  word  "rates"  instead  of  taxes  and  the 
words  "Common  Carriers"  instead  of  Congress  and  Presi- 
dent, there  is  no  substantial  misstatement  of  fact  in  the  first 
paragraph. 

In  round  figures,  the  railroads  will  haul  during  the  com- 
ing year,  2,000,000,000  tons  of  freight,  for  which  service 
they  will  be  paid  in  round  figures  $2,000,000,000.  This 
great  tax,  more  than  the  government  revenues  of  the  United 
States,  Great  Britain,  France  and  Germany,  the  people  o>f  this 
country — all  of  us  who  eat,  drink,  sleep  in  houses  and  wear 
clothes — must  pay.  Nor  is  the  tax  in  itself  unjust.  But  in 
apportioning  the  tax,  the  railroads  will  base  the  distribution 


24  EFFECT  ON  LAND  VALUES 

of  the  burden  upon  three  prime  factors  of  computation: 
classification,  weight  and  length  of  haul.  Now  as  I  have 
said,  this  third  factor  of  rate  computation  is  the  economic 
wrong  which  is  chiefly  responsible  for  that  unfair  distribu- 
tion of  created  wealth  that  causes  nearly  all  our  social  and 
financial  distresses.  And  evidently,  the  freight  tax  falls 
lightest  on  hini  best  able  to  pay,  and  heaviest  on  him 
least  able  to  pay.  The  farmer,  for  example,  living  twenty 
miles  from  the  city  market,  ships  his  produce  to,  and  his 
purchases  from  that  market  for  much  less  cost  than  does 
the  farmer  living  two  hundred  miles  from  the  market.  Yet 
the  farmer  who  pays  the  much  smaller  tax  for  the  equal 
service — equal  as  far  as  both  farmers  are  concerned  surely — 
of  getting  the  same  amount  of  produce  to  market,  is  in  every 
way  best  able  to  pay,  owing  to  the  very  advantages  which 
his  proximity  to  market  gives  him.  The  consideration  of 
this  point  brings  us  at  once  face  to  face  with  the  most  im- 
portant question  of  all — the  probable  effect  of  the  Common 
Rate  upon  land  values. 

To  my  mind,  by  far  the  most  beneficial  first  effect  of  a 
universal  like  freight  charges  for  like  goods  of  like  weight, 
regardless  of  distance,  would  be  the  inevitable  and  rapid 
movement  of  all  land  values,  upward  and  downward,  toward 
a  permanently  common  level.  Not  that  absolute  equality  of 
value  would  take  place,  of  course;  but  a  strong  tendency  to 
equality,  and  permanent  equality,  would  unquestionably  set 
in.  It  is  unnecessary  to  go  into  extended  argument  to  prove 
that  such  an  approximate  equalization  of  land  values  would 
attend  upon  an  equalization  of  freight  rates.  Farming  land 


EFFECT  ON  LAND  VALUES  25 

twenty  miles  from  the  city  in  which  I  live,  rents  for  $25  an 
acre,  and  sells  for  from  $250  to  $350  an.  acre,  simply  be- 
cause it  has  cheap  rates  to  and  from  the  city.  If  the  same 
freight  rates  for  milk,  butter,  eggs,  poultry  and  garden  and 
orchard  products  were  annexed  to  all  lands  within  a  radius 
of  five  hundred  miles  from  the  city;  it  is  certain  that  there 
would  be  a  fall  in  the  selling  and  rental  values  of  the  near- 
by land  and  a  rise  in  the  selling  and  rental  value  of  the  out- 
lying land.  The  fall  would  be  much  more  marked  than 
the  corresponding  rise,  because  the  loss  would  be  to  a  com- 
paratively few  acres  and  the  gain  would  be  spread  over  a 
great  many  more  acres.  But  there  would  be  no  loss  to  the 
farming  community  as  a  whole.  There  would  be  simply  a 
redistribution  of  values  among  a  great  number  of  farmers. 
Indeed,  with  the  impulse  given  to  increased  production,  and 
the  consequent  employment  of  more  consuming  labor  on  the 
farms  and  in  the  city,  there  would  not  only  be  no  loss,  but 
a  decided  gain,  by  way  of  decreased  cost  of  food  products, 
since  those  products  could  be  more  cheaply  produced,  at 
better  average  profit,  on  the  lower  priced  lands.  The  only 
losers  would  be  the  comparative  hand  full  of  owners  of  high- 
priced  used  and  unused  lands,  lying  close  to  the  city.  In  other 
words,  Privilege  would  lose  just  so  much  power  to  tax  in- 
dustry, and  producing  and  consuming  Capital  and  Labor 
would  have  just  that  much  more  wealth  to  divide  between 
them. 

Poets  are  prone  to  sing  of  rural  felicity  and  well-dis- 
posed gentlemen  of  the  pen,  many  of  whom  could  not  dif- 
ferentiate a  hay-rake  from  a  hop-pole,  are  ever  ready  to 


26  EFFECT  ON  LAND  VALUES 

demonstrate  in  print  that  the  American  farmer  lives  an  ideal 
life  of  independence,  ease  and  comfort.  But  the  American 
farmer  knows  better  and  so  does  his  wife.  Statistics  showing 
enormous  crops  and  great  prices  are  as  misleading  as  statistics 
are  wont  to  be.  The  farmer  knows  he  grows  the  enormous 
crops.  He  also  knows  that  he  does  not  get  the  enormous 
prices.  As  a  matter  of  fact,  he  is  lucky  if  he  gets  one-third 
of  the  immense  sums  paid  annually  by  the  consumer  for  the 
products  of  the  farms.  The  life  of  the  farmer  living  at  any 
considerable  distance  from  the  great  markets  is  hard,  his  work 
is  hard,  his  hours  of  labor  long  and  his  profits  a  niggardly 
return,  indeed,  for  the  capital  invested  and  the  labor  per- 
formed by  himself  and  his  family.  True,  under  exceptional 
circumstances,  large  profits  are  made  in  farming.  The  raisin 
farms  about  Fresno;  the  apple  farms  of  Southern  Oregon 
and  of  the  Hood  River  and  Yakima  Valley  regions;  the 
melon  farms  of  the  Imperial  Valley;  the  fruit  and  vegetable 
farms  in  many  scattered  localities,  have  earned  their  owners 
great  profits.  These  are  exceptions.  And  it  is  a  fact  that  as 
soon  as  one  of  these  highly  profitable  specialized  branches  of 
farming  shows  evidence  of  permanence  of  high  profits,  that 
branch  usually  begins  to  pass  from  the  hands  of  independent 
horticulturists  or  vineyardists  or  vegetable  growers,  as  the 
case  may  be,  into  the  hands  of  speculative  corporate  combina- 
tions which  soon  apply  the  pressure  of  more  favorable  freight 
rates  to  the  remaining  independent  small  owners. 

If  crops  of  any  given  kind  went  to  every  market  from 
every  farm  on  even  terms  of  freight,  an  intensive  system  of 
farming  small  holdings  would  be  at  once  possible  on  millions 


EFFECT  ON  LAND  VALUES  27 

of  acres  where  it  is  not  now  possible.  This  would  operate 
greatly  to  increase  the  farmers'  profit  and  decrease  his  labor, 
for  every  farmer  knows  that  it  costs  less  money  and  work 
to  cultivate  an  acre  in  a  highly  profitable  way  than  two 
acres  in  order  to  get  the  same  gross  profit.  The  small  farm, 
worked  to  its  limit  of  production,  is  the  minimum  of  labor 
with  the  maximum  of  profit.  But  the  small  farm,  is  depen- 
dent for  its  existence  upon  freight  rates  to  market  which  it 
cannot  now  obtain  unless  close  to  those  markets.  With  the 
Common  Rate  in  operation,  these  small  intensely  cultivated 
farms  would  abound,  doubling  and,  perhaps,  quintupling  the 
productive  capacity  of  our  farming  area.  Thus  homes  and 
a  comfortable  living  would  be  provided  for  millions  more  of 
the  population.  The  element  of  speculative  value  having 
disappeared,  large  idle  holdings  would  rapidly  be  cut  up 
into  small  tracts  and  disposed  of  on  equitable  terms  to  actual 
users. 

It  is  true  that  small  tracts  can  be  purchased  now,  in 
many  districts,  cheaper  than  they  could  be,  probably,  if  the 
Common  Rate  were  in  force.  But  it  is  also  true  that  under 
present  conditions  one  of  these  small  tracts,  in  these  districts, 
could  not  produce  enough  profit  to  keep  a  healthy  chicken 
fed.  Five  or  ten  acres,  located  where  freight  rates  on  butter, 
eggs,  poultry,  milk,  cheese,  fruits,  berries  and  like  products 
are  prohibitive,  might  produce  a  bare  living  that  would  sat- 
isfy a  Russian  moujik  or  an  Indian  ryot,  but  which  would 
certainly  not  tempt  an  American  to  bend  his  back  to  the 
work  of  cultivation.  The  living  cost  and  the  profits  of  the 
small  farmer  must  come  largely  from  the  profitable  market- 


28  EFFECT  ON  LAND  VALUES 

ing  of  dairy  and  poultry  and  orchard  and  garden  products — 
the  very  things  for  which  the  consumer  now  pays  extravagant 
prices  and  of  which  the  nation,  with  all  its  wealth  of  soil, 
never  has  enough.  The  country  could  absorb  the  produce  of 
hundreds  of  thousands  of  such  small  farms.  The  ability  to 
consume  would  keep  pace  with  the  increased  ability  to  pro- 
duce. For  it  must  be  remembered,  maugre  some  of  the 
doctrinaires,  that  in  actual  life  the  supply  most  frequently 
creates  the  demand,  that  wealth  breeds  wealth,  that  pro- 
duction excites  consumption.  If  we  doubled  the  production 
of  farm  wealth,  we  would  just  as  certainly  increase  to  that 
extent  the  profitable  production  of  manufactured  wealth, 
with  a  corresponding  profitable  increase  of  all  the  incidental 
activities  of  trade  and  commerce.  No  nation  ever  did  or 
ever  will  injure  itself  or  suffer  loss  by  the  increased  pro- 
duction of  wealth  in  any  form — though  it  is  conceivable  that 
individuals  might  do  themselves  thus  a  temporary  injury. 
Over-production  is  a  bugaboo,  fit  only  to  frighten  children. 
It  has  no>  existence  as  an  injurious  factor  in  national  life. 

There  need  be  no  fear  that  if  farm  land  values  were 
approximately  equalized  by  the  Common  Rate,  all  our  farmers 
would  rush  to  cultivate  special  crops  and  leave  none  to  grow 
the  wheat,  the  corn,  the  oats,  the  barley,  the  hay  and  such 
necessary  and  homely  yields.  The  American  farmer  is  no 
fool.  His  eyes  are  open.  He  looks  ahead.  What  is  needed, 
he  will  grow.  The  fact  is,  that  with  the  Common  Rate, 
every  section  would  grow  the  crops  for  which  the  soil  is  best 
fitted  and  the  climate  most  favorable,  for  with  the  artificial 
restraints  of  unequal  freight  rates  removed,  there  would  be 


EFFECT  ON  LAND  VALUES  29 

no  inducement  to  do  anything  else.  The  wheat-grower,  for 
example,  knowing  that  it  then  would  cost  him  just  as  much 
to  ship  wheat  from  any  farm  to  any  market,  would  waste 
no  time  in  looking  for  good  wheat  land  close  to  market,  but 
would  confine  his  attention  to  getting  the  best  land  for 
wheat  growing,  no  matter  where  situated.  He  will  not  care 
at  all  whether  it  is  in  Dakota,  Texas  or  California.  So  with 
the  corn-grower,  the  hay-grower,  the  oats-grower  and  every 
other  grower.  Open  all  markets  to  all  lands  on  the  same 
terms  and  common  sense  will  send  every  man  to  the  land 
best  suited  to  his  specialty.  Thus  the  lands  would  be  used, 
by  mere  force  of  natural  selection,  to  the  very  highest  ad- 
vantage of  which  they  were  capable;  and  this,  taking  place 
all  over  the  country,  would  greatly  enlarge  the  production  of 
wealth  on  the  lands  now  under  cultivation. 

When  I  contemplate  the  estate  of  competence  and  digni- 
fied independence  to  which  millions  of  American  husband- 
men wrould  be  raised  by  the  operation  of  the  Common  Rate; 
when  I  see,  in  prospect,  the  countless  homes  provided  abund- 
antly with  conveniences  and  luxuries;  when  I  think  of  the 
burdens  of  ceaseless  labor  and  hard  living  that  would  be 
lifted  from  so  many  patient  shoulders;  of  the  comforts  that 
would  be  brought  to  so>  many  women,  worn  with  hopeless 
drudgery;  of  the  literature  that  might  then  be  had  to  en- 
tertain and  instruct  and  refine;  of  the  fuller  tables  and  the 
happier  homely  firesides,  I  confess  that  my  heart  swells  with- 
in me. 

The  picture  is  no  idle  vision — of  that  I  am  sure.  Some 
day  the  men  of  my  country  will  write  into  their  laws  the 


3O  EFFECT  ON  LAND  VALUES 

righteous  statute  which  will  make  a  splendid  reality  of  that 
which  is  now  but  the  hope  and  faith  of  one  of  the  humblest 
of  the  citizens  of  the  great  Republic.  The  acorn  falls  and 
is  trodden  under  a  careless  foot;  the  suns  shine  and  the  rains 
fall  and,  in  the  times  of  God,  a  mighty  oak  spreads  its 
branches  and  men  draw  gladly  to  the  shade  and  shelter  of 
its  stately  and  benignant  presence.  And  so,  I  have  faith  to 
believe,  will  it  be  with  the  seed  of  this  economic  truth. 


The  Effect  of  the  Common  Rate  on 
City  Land  Values 

T"1HE  effect  of  the  Common  Rate  upon  land  values  in 
I  cities  would  naturally  be  moTe  sudden  and  more 

marked   than   the   effect   upon   farm   land   values. 

There  is  an  enormously  greater  difference  in  the 
prices  of  urban  lands  than  there  can  ever  be  in  the  prices 
of  farm  land ;  and  since  one  small  lot  in  a  city  may  be,  and 
often  is,  worth  a  thousand  times  as  much  as  a  lot  of  the  same 
size  in  the  same  city,  a  decided  movement  toward  nearer 
equality  in  these  values  would  doubtless  greatly  decrease  many 
large  private  fortunes  and  would  certainly  greatly  curtail  the 
profit  of  the  real  estate  speculator.  And  it  is  probably  true 
that  the  movement  toward  equality  would  not  be  a  move- 
ment of  lower  values  upward  and  higher  values  downward 
in  the  great  cities,  but  a  decided  fall  in  the  values  of  high- 
priced  land  in  such  localities,  and  a  slight  and  much  slower 
rise  in  the  values  of  land  in  small  cities  and  towns.  This 
would  be  due  to  the  single  fact  that  the  great  cities  are  few 
and  the  aggregate  loss  would  be  concentrated,  while  small 
cities  and  towns  are  numerous  and  the  corresponding 
aggregate  gain  would  be  widely  distributed  over  a  great 
area.  But,  to  my  mind  this,  while  disagreeable  to  the  rich 
few,  would  be  a  happy  and  beneficial  result  to  the  many.  And 
as  I  have  said  before,  the  true  theory  of  government  and  of 
society  is  to  seek  the  greatest  good  of  the  greatest  number. 


32  VALUES  THAT  WOULD  FALL 

The  justice  of  the  Common  Rate  must  be  measured,  not  by 
its  results  upon  the  fortunes  of  these  individuals  or  those,  but 
upon  the  fortunes  of  the  whole  mass  of  the  people.  The 
question  to  ask  and  answer  is  not  whether  Landlord  Jones  or 
Smith  will  be  worse  off  or  better  off,  but  whether  the  whole 
community,  which  by  its  presence  on  the  spot  alone  has  made 
Landlords  Smith  and  Jones  rich,  with  no  effort  on  their  parts, 
will  be  better  off. 

Not  long  ago  a  writer  in  one  of  the  popular  magazines 
made  a  sententious  statement,  the  full  importance  of  which 
he  probably  did  not  himself  realize,  but  the  truth  of  which 
is  certain.  "Freight  rates,"  said  he,  "make  cities."  And  he 
might  have  added,  "and  unmake  cities."  Andrew  Carnegie, 
in  one  of  his  entertaining  books,  tells  how  he  saved  Pitts- 
burg's  rank  as  a  steel-making  center  by  compelling  the  Penn- 
sylvania railroad  to  grant  Pittsburg  freight  rates  to  impor- 
tant markets  no  higher  than  rates  enjoyed  by  dangero-us 
rivals.  He  won  his  point  by  a  not  idle  threat  to  build  a  com- 
peting road.  There  is  not  the  slightest  doubt  that  the  small 
difference  in  shipping  a  ton  of  steel,  thus  forced  from  a  rail- 
road many  years  ago,  made  Pittsburg.  All  our  great  cities 
are  simply  the  gigantic  embodiment,  in  brick  and  stone  and 
steel,  of  advantages  in  freight  rates.  Thirty  years  ago  a  lot 
on  the  principal  street  o<f  the  city  in  which  I  write  could  have 
been  bought  for  $25  a  front  foot.  Today  the  same  lot  would 
sell  for  $5,000  the  front  foot.  Freight  rates  did  that.  Thirty 
years  ago  a  lot  in  the  village  where  I  was  born  would  fetch, 
perhaps,  $10  the  front  foot.  Today  the  same  lot  is  worth 
no  more.  Freight  rates  did  that.  Thirty  years  ago  farm 


VALUES  THAT  WOULD  FALL  33 

land  close  to  this  city  would  fetch  $10  an  acre;  now  it  sells 
for  $500  an  acre.  Thirty  years  ago  my  father's  farm  was 
worth  $100  an  acre.  It  is  worth  no  more,  if  as  much,  today. 
Freight  rates  raised  the  value  in  one  case  and  kept  the 
value  stationary  in  the  other.  It  is  only  after  carefullest  con- 
sideration and  most  laborious  thinking  that  we  can  come  to 
a  full  realization  of  the  enormous  power  of  freight  rates  to 
affect  every  condition  of  society  and  almost  every  action  o>f 
our  daily  lives.  No  autocrat,  no  Czar,  no  Caesar,  ever  could 
hand  down  rescript  or  decree  which  could  so  nearly  touch  the 
lives  and  fortunes  of  cities  and  men  with  irresistible  powTer, 
as  can  our  railroad  tariff-makers. 

The  practical  destruction  of  high  speculative  values  of 
city  real  estate  would  not  destroy  a  penny's  worth  of  actual 
wealth.  These  speculative  values  only  measure  the  amount 
of  wealth  which  non-producers  annually  take  from  the  pro- 
duction of  active  Capital  and  Labor.  They  do  not  add  one 
cent's  worth  of  real  wealth  to  the  common  stock.  To  destroy 
them  is  only  to  destroy  the  power  of  Privilege  to  prey  on 
industry.  It  is  certain  that  in  any  year,  in  any  community, 
Capital  and  Labor  exerted  on  land  will  produce  only  a  given 
amount  of  wealth.  It  is  certain  that  Capital  and  Labor  can 
only  divide  what  is  left  of  their  joint  product  when  Privilege 
has  taken  its  toll  in  the  shape  of  rent.  And  it  is  certain  that 
the  higher  speculative  real  estate  values  are  in  that  community 
the  more  Rent  will  take  from  the  joint  produce  of  Capital 
and  Labor  and  the  less  produce  Capital  and  Labor  will  have 
to  divide.  Economic  laws  are  as  sure  to  fulfill  themselves  as 
are  the  laws  of  the  physical  world.  And,  hence,  so  far  from 


34  VALUES  THAT  WOULD  FALL 

being  desirable,  high  speculative  real  estate  values  are  a  curse 
to  the  community.  They  prey,  by  night  and  by  day,  upon 
the  very  vitals  of  prosperity. 

The  extravagant  figures,  constantly  paraded  with  so 
much  pomp  of  advertising,  setting  forth  triumphantly  the 
phenomenal  rise  in  real  estate  values  in  this  or  that  city,  are 
really  pitiable  exhibits,  and  form  an  unpleasant  commentary 
on  the  state  of  public  intelligence.  Lazarus,  parading  his 
sores,  and  exposing  with  particular  pride  a  new  and  rapidly 
swelling  tumor,  would  be  as  sensible  an  exhibition.  The 
faster  the  speculative  values  rise  the  faster  the  law  of  dimin- 
ishing returns  to  Capital  and  Labor  works,  and  the  sure 
eventual  result  is  a  city  with  fat  landlords,  lean  business  men 
and  leaner  workmen.  Up  goes  rent  and  down  come  interest 
and  wages.  And  all  the  time  the  prime  necessaries  of  life — 
clothing,  food  and  shelter — refuse  to  fall,  if  they  do  not 
actually  increase  in  cost. 

The  Law  of  Diminishing  Returns  simply  means  that  on 
a  given  quantity  of  land  (using  the  term  "land"  in  its  full 
economic  sense)  more  and  more  Capital  and  Labor  can  be 
expended  with  increasing  profit  only  up  to  a  certain  point 
where  profit  will  begin  to  decrease  and  continue  to  grow  less 
and  less.  As  country  folks  put  it,  one  cannot  farm  a  one- 
horse  farm  with  a  six-horse  team  and  make  things  pay.  Now, 
this  law  applies  not  only  to  farms,  but  to  all  business;  and 
not  only  to  individuals,  but  to  communities — towns  and  cities 
in  mass.  The  owners  of  real  estate  which  has  speculative 
value  are  constantly  inciting  more  building  and  the  exertion 
of  more  Capital  and  Labor,  by  urging  on  the  increase  of  pop- 


VALUES  THAT  WOULD  FALL  35 

ulation.  The  result  is  to  increase  land  values  and  rent,  of 
course;  but  since  no  one  can  eat  his  cake  and  keep  it,  and 
since  where  there  is  dancing  the  piper  must  be  paid,  the 
inevitable  outcome  of  a  period  of  "boom"  is  a  period  of  ex- 
haustion— with  much  gain  to  the  few  and  much  loss  to  the 
many.  Every  so  often  the  result  of  this  thing  going  on  all 
over  the  country  simultaneously  is  called  a  "panic";  when 
we  see  the  painful  and  absurd  phenomenon  of  a  great  people, 
equipped  with  the  finest  machinery  of  production,  used  to 
have  and  to  need  wealth,  with  enormous  harvests  in  field  and 
granary,  and  no  visible  natural  reason  for  a  wheel  to  stop  or 
a  workman  to  cease  working,  sitting  in  national  idleness  and 
distress — helpless  as  a  babe  in  the  midst  of  abundance!  The 
truth  is  that  speculative  land  values — economic  Rent — have 
taken  so  much  of  the  production  of  Capital  and  Labor  that 
these  two  are  bankrupt.  They  have  not  only  given  up  an 
enormous  share  of  the  wealth  they  have  produced,  but  have 
mortgaged  their  future  production.  This  subject,  however, 
I  shall  not  now  discuss,  as  its  importance  deserves  the  fuller 
treatment  I  mean  to  accord  it  in  another  chapter  of  this  work. 
The  marked  fall  in  speculative  land  values  would  un- 
questionably check  the  excessively  rapid  growth  of  population 
which  is  now  so  characteristic  of  our  American  cities.  This 
will  seem  an  evil  result  to  some,  but  to  the  student  of  men 
and  affairs  it  will  seem,  I  think,  a  benefit  of  high  importance 
to  the  nation.  The  congestion  of  population  in  a  few  great 
centers,  which  is  the  work  of  advantageous  freight  rates — 
they  being  the  cause,  as  high  speculative  real  estate  values 
are  primarily  the  effect  of  increased  population — is  a  problem 


36  VALUES  THAT  WOULD  FALL 

to  which  the  nation  must  address  itself  with  thoughtful  con- 
cern. Our  cities  grow  too  fast  in  proportion  to  our  national 
growth.  To>  recruit  the  armies  which  march  through  their 
streets  the  rural  communities  are  robbed  of  their  best  youth 
and  their  wisest  age.  Into  the  hoppers  of  these  enormous 
mills  of  activity  are  poured  the  brains  and  energy  of  the  land. 
Nor  is  the  grist  that  comes  out  altogether  good.  Excessive 
individual  riches  and  much  poverty;  political  and  business 
methods  which  skate  continually  on  the  thin  ice  of  dishonesty, 
if  not  criminality;  a  very  general  lowering  of  tone — these 
are  unquestionably  some  of  the  results  of  life  today  in  great 
cities.  Now,  it  is  as  true  as  when  the  Teacher  said  it  that 
man  does  not  live  by  bread  alone.  Character  is  above  dollars 
as  a  national  asset.  We  Americans  have  an  inborn  faith  in 
our  ability  to  achieve  anything  material  that  can  be  achieved. 
We  face  the  problem  of  subduing  nature  to  our  needs  with 
alert  optimism,  and  as  will  as  readily  undertake  to  remove 
mountains  as  mole  hills.  And  this  is  well.  Otherwise,  the 
buffalo  might  yet  be  cropping  the  grass  of  the  prairies  and 
the  Indian  lighting  his  camp  fire  in  the  passes  of  the  Rockies. 
But  if  we  go  on  from  achievement  to  achievement,  from 
triumph  to  triumph,  and  keep  not  fastheld  the  righteousness 
as  well  as  the  valor  of  our  fathers,  what  shall  all  its  gains 
avail  the  Republic?  Surely,  as  it  was  said  of  olden  time,  it 
shall  profit  a  nation  nothing  if  it  gain  the  whole  world  and 
lose  its  own  soul. 

The  physical  body  to  remain  sound  in  health  demands 
balanced  food,  balanced  exercise  of  its  powers  and  an  undis- 
turbed equilibrium  of  the  mechanical  and  chemical  processes 


VALUES  THAT  WOULD  FALL  •   37 

of  its  atoms.  This  equilibrium  is  as  necessary  to  the  health 
of  states  as  of  individuals.  And  this  equilibrium  the  excessive 
growth  of  our  cities,  at  the  expense  of  the  small  towns  and 
rural  districts,  continually  disturbs.  The  results  are  a  loss 
of  possible  productive  power,  an  undue  concentration  of  Cap- 
ital and  Labor  in  restricted  territories,  the  gain  of  great 
wealth  by  some  non-producers  at  the  expense  of  great  loss 
by  many  producers.  A  careful  observer  cannot  fail  to  see 
this  evil  cause  resulting  in  these  evil  effects  everywhere  in 
the  land. 

This  evil  has  not  escaped  the  eyes  of  good  men.  At 
present  there  is  an  earnest  effort  on  foot  to  return  the  surplus 
of  this  urban  population  to  the  country.  "Back  to  the  land" 
is  the  watchword  of  those  in  this  work.  The  purpose  is 
undoubtedly  good  and  the  work,  in  a  measure,  a  benefit. 
But  it  remains  true  that  as  long  as  the  attractions  of  the  city 
continue  to  be  greater  than  the  attractions  of  the  country,  so 
long  will  men  of  ambition  and  energy  desert  the  farm  and 
the  village  for  the  great  town.  The  moment  we  begin  to 
equalize  the  opportunities  for  gain  in  the  village  and  in  the 
city,  that  moment  will  Capital  and  Labor  and  population 
begin  to  diffuse  themselves  over  wider  areas  and  the  natural 
equilibrium  of  things  be  restored.  And  this  necessary  funda- 
mental equalization  of  gainful  opportunities  the  Common 
Rate  will  bring  about  automatically.  The  rising  of  tomor- 
row's sun  is  not  more  sure. 


The  Effect  of  the  Common  Rate  on  Towns  and 

Villages 

|N  THE  foregoing  chapter,  I  asserted  that  the  fall  in 
speculative  real  estate  values  and  the  check  of  the 
growth  of  population  in  those  cities,  would  be 
accompanied  by  a  slower,  but  sure,  rise  in  the 
real  estate  values  of  small  towns  and  farming  districts, 
as  well  as  in  an  increase  of  population  at  such  points. 
Let  us  now  go  into  an  examination  of  this  matter, 
which  certainly  is  one  of  importance,  for  the  fundamental 
argument  for  the  Common  Rate  is  that  it  will  diffuse  the 
wealth  constantly  being  created  more  equally  among  those 
creating  that  wealth.  The  contention  I  have  in  view  all  the 
time  is  that  the  first  great  cause  of  so  much  poverty  in  the 
midst  of  so  much  wealth-making  is  the  unfair  distribution  of 
wealth  brought  about  by  unequal  transportation  charges, 
which  gave  artificial  and  grossly  unfair  values  to*  real  estate 
in  certain  limited  districts.  I  have  tried  to  show  that  the 
result  of  the  Common  Rate  would  be  a  fall  in  these  values 
in  those  districts,  and  I  think  it  is  equally  certain  that  the 
values  taken  away  from  unduly  favored  points  will  not  be 
destroyed  and  lost,  but  will  be  distributed  over  the  whole 
country  and  among  the  whole  mass  of  capital-providers  and 
workers. 

"Rent,"  says  Ricardo,  "is  always  the  difference  between 
produce  (i.  e.  the  market  value)  obtained  by  the  employment 
of  two  equal  quantities  of  capital  and  labor  (on  land). 


4O  VALUES  WHICH  WOULD  RISE 

Whatever  diminishes  the  inequality  of  produce  obtained  from 
successive  portions  of  capital  (and  labor)  employed  on  the 
same  or  new  land,  tends  to  lower  rent,  and  whatever  increases 
the  inequality  necessarily  produces  an  opposite  effect  and 
tends  to  raise  rent." 

Since  we  see  that  in  our  times  the  productivity  of  land 
— that  is  to  say,  the  market  price  of  its  product — is  depen- 
dent upon  freight  rates  to  market,  it  follows,  if  the  Ricardian 
law  be  sound  (as  it  is)  that  the  equalizing  of  the  freight 
rate  would  destroy  the  inequality  of  produce  (except  natural 
inequality  of  fertility,  which  in  modern  days  is  a  factor  of 
no  great  importance)  and  so  would  everywhere  lower  rent. 
This  would  bring  about  automatically,  as  I  have  said,  a 
decided  fall  in  high  speculative  land  values,  markedly  in  the 
great  cities  and  an  eventual  widely  diffused  rise  in  land 
values  in  small  towns  and  farming  districts.  But  this  rise 
would  come  about  slowly,  since  the  operation  of  the  Com- 
mon Rate  would  make  so  much  more  land  and  so  many  more 
manufacturing  opportunities  available  for  the  employment  of 
Capital  and  Labor,  that  Capital  and  Labor  would  every- 
where be  sought  by  Land,  and  not  Land  by  Capital  and 
Labor.  This  would  cause  a  long  period  of  low  rent,  low 
speculative  values,  and  high  interest  and  high  wages,  accom- 
panied, of  course,  by  great  trade  activity  and  wide-spread 
prosperity. 

The  beneficial  effect  upon  the  trade  and  growth  of  the 
small  towns  and  villages  would  be  very  marked.  The  village 
merchant  would  be  able  to  buy  his  stocks  as  cheap  as  the  city 
merchant.  With  less  rent  to  pay  he  could  certainly  sell  as 


VALUES  WHICH  WOULD  RISE  4! 

cheap  as  the  city  man.  He  could  make  a  substantial  reduc- 
tion in  nearly  all  lines  to  his  customers  and  still  have  good 
profit.  This  would  result  in  increased  quantity  of  goods 
bought  of  him,  and  the  ability  on  his  part  to  carry  larger  and 
better  assortments  of  goods.  The  village  farmer,  mechanic 
or  manufacturer,  enjoying  equal  markets  with  the  farmer, 
mechanic  or  manufacturer  near  or  in  the  city,  would  have 
larger  profits  and  higher  wages,  and  more  wealth  to  exchange 
for  goods.  This  increase  in  farm  and  village  opportunities 
for  gain,  would  result  in  keeping  at  home  and  attracting  back 
home  the  hundreds  of  thousands  of  men  who  are  now 
crowded  into  the  great  centers  of  population  by  lack  of  oppor- 
tunity to  do  well  in  their  native  rural  districts.  And  so  the 
rural  districts  would  grow  in  population  as  well  as  in  wealth. 
And  as  population  makes  increase  of  land  values,  the  steady 
annual  increase  of  these  values  would  be  distributed  all  over 
the  country  among  the  whole  people.  How  beneficial  this 
diffusion  of  capital  and  labor  engaged  in  wealth-making 
would  be  to  the  railroads  themselves  is  evident,  but  that  sub- 
ject I  shall  treat  of  at  some  length  later. 

"The  destruction  of  the  poor,"  said  the  Wise  King,  long 
ago,  "is  their  poverty,"  and  in  the  modern  world  this  saying 
is  sharply  accentuated,  not  only  in  the  case  of  individuals,  but 
also  in  the  case  of  communities.  Everywhere  we  see  those 
least  able  to  pay,  paying  the  highest  prices  for  necessaries.  In 
the  populous  cities,  the  poor,  who  buy  fuel  by  the  sack,  food 
by  the  dime's  worth,  clothing  little  by  little,  and  a  home  in 
the  shape  of  one  or  two  miserable  rooms,  pay  a  much  greater 
price  than  the  rich  do  for  the  same  quantity  of  necessaries. 


42  VALUES  WHICH  WOULD  RISE 

In  a  measure  this  holds  good  of  small  communities.  They 
pay  more  for  the  same  goods  than  the  people  in  large  cities 
do,  though  the  people  in  large  cities  have  to  pay  a  much 
greater  tax  in  the  shape  of  higher  rents  added  to  the  cost  of 
goods.  But  on  the  other  hand,  since  the  large  cities  are  made, 
by  favor  of  the  railroads,  the  distributing  centers  for  the 
goods  that  go  to  the  small  communities,  these  again  must  pay 
a  tax  on  added  cost  of  local  freight  charges,  and  a  share  of 
the  city  shippers'  high  rents.  Add  to  this  the  greater  propor- 
tional cost  of  carrying  on  many  scattered  business  enterprises 
than  of  carrying  on  one  great  city  business,  and  the  result  is 
as  stated — the  people  in  small  communities  pay  more  for  the 
same  goods  than  the  people  in  great  cities. 

Now,  the  moment  the  Common  Rate  was  put  in  opera- 
tion this  condition  would  vanish.  For^once  the  city  and  vil- 
lage are  put  on  equal  terms  as  to  freight,  the  factor  of  high 
rents  in  the  city  and  low  rents  in  the  village  will  overcome 
the  factor  of  greater  economy  in  operating  business  on  a  large 
scale  instead  of  a  small  scale,  and  the  prices  of  goods  every- 
where would  tend  to  come  to  a  common  level.  This  condi- 
tion, of  course,  would  react  upon  the  excessively  high  rents 
in  cities,  but  the  final  result  would  be  a  nearer  equalization 
in  rental  values  and  in  selling  prices  of  goods  everywhere. 
This  would  bring  about  a  constant  steadiness  of  market 
prices,  a  very  great  benefit  to  producer  and  consumer f\  I  am 
inclined  to  think  that  this  steadiness  of  prices  and  easy  and 
equal  access  to  all  markets  would  have  the  curious  effect  of 
putting  the  gentlemen  who  gamble  with  the  necessaries  of 
life  in  the  exchanges  of  New  York  and  Chicago  and  other 


VALUES  WHICH  WOULD  RISE  43 

cities  practically  out  of  business.  The  only  opportunities 
these  men  have  to  rob  their  stupid  victims  are  afforded  by 
the  fluctuations  of  prices  of  cotton,  wheat,  oats,  etc.,  and 
while  these  fluctuations  are  artificially  excited  by  the  gentry 
who  rig  these  games,  the  calculations  that  bring  them  about 
are  all,  in  the  last  analysis,  based  on  the  freight  cost  of  get- 
ting a  certain  portion  of  the  crops  to  market.  But  however 
that  may  be,  the  opening  of  all  markets  to  every  farmer  and 
every  small  manufacturer  or  merchant,  would  unquestion- 
ably put  the  millions  of  our  people  who  live  on  farms  and  in 
small  communities  on  such  a  basis  of  prosperity  as  they  have 
never  enjoyed. 

It  is  to  this  great  body  of  American  citizenry  that  I 
make  my  appeal.  Long  residence  in  great  cities  has  not 
resulted  in  admiration  of  all  the  influences  surrounding  life 
in  those  centers.  With  much  that  is  fine,  there  is  much  that 
is  debasing.  Side  by  side  with  a  few  thousand  successful  rich 
men  are  many  thousands  of  those  who,  in  the  homely  phrase 
"just  get  along"  and  cheek  by  jowl  with  these  are  many  thous- 
ands of  the  ignorant  and  vicious — the  rag-tag  and  bobtail  of 
Europe  and  Asia,  the  tenement  workers,  the  sweat-shop 
slaves,  the  saloon  keepers,  prostitutes,  macquereaux  and  their 
protectors  among  the  politicians  and  police.  These  infamous 
and  festering  sores  on  the  body  politic  spread  their  poison 
through  all  its  veins  and  arteries.  With  less  of  outward  cul- 
ture and  refinement  than  the  dwellers. in  cities,  it  is  true 
nevertheless  that  the  sound,  healthy  mass  of  American  citizen- 
ship is  in  the  country.  There,  in  the  villages  and  among  the 
fields,  dwells  the  final  hope  of  the  nation.  There  yet  is  to 


44  VALUES  WHICH  WOULD  RISE 

be  found  the  breed  of  men  whose  fathers  knelt  behind  the 
rail-fences  at  Bunker  Hill;  who  met  with  an  equal  bravery, 
whether  in  blue  or  in  gray,  in  the  shock  of  arms  on  Gettys- 
burg's famous  field.  And  there  must  the  Republic  seek  her 
strong  help  when  beset  by  foes  within  or  without. 

As  this  is  written  a  newspaper  lies  at  hand — a  shameless 
journalistic  prostitute — which  gloats  in  huge  type  over  the 
fact  that  the  city  in  which  it  is  printed  has  just  turned  out 
of  office  a  scholarly  and  upright  Mayor,  and  a  Board  of 
Supervisors  composed  of  honest  and  intelligent  citizens,  to 
make  room  for  a  noisy  and  vicious  demagogue  and  an  accom- 
panying crowd  of  ex-prizefighters,  ward-heelers  and  scum  of 
that  sort.  For  three  years  a  little  band  of  public-spirited 
citizens  have  given  freely  of  their  money  and  time  and  effort 
to  cleanse  that  city  of  its  shame  and  corruption,  and  their 
reward  has  been  a  torrent  of  falsehood,  abuse  and  vitupera- 
tion of  almost  inconceivable  malignity;  and  this,  too,  poured 
out,  not  alone  by  the  low  habitants  of  the  slums,  but  by 
editors,  lawyers,  bankers  and  business  men  suborned  by 
powerful  interests  whose  rascality  was  in  danger  of  justice. 
What  we  see  in  San  Francisco,  in  Philadelphia,  in  Chicago, 
in  St.  Louis,  in  dozens  of  cities,  justifies  the  belief  that  our 
cities  contain  too  many  poor  and  idle — that  they  grow  too 
fast  for  their  own  and  the  national  good.  To  break  up  the 
tendency  of  our  people  to  flock  to  these  centers  and  to  make 
the  decent,  orderly,  clean  life  of  the  farm  and  country  town 
more  gainful  and  more  attractive  is  a  work  to  which  the  best 
intelligence  and  the  most  unselfish  patriotism  may  well  bend 
their  utmost  effort. 


The  Effect  of  the  Common  Rate 
on  Manufacturers 

|HE  most  striking  change  in  the  American  life  which 
has  occurred  within  the  memory  of  men  not  yet 
old,  is  the  almost  total  disappearance  of  the  small 
manufacturer  and  the  independent  mechanic.  When 
men  now  of  middle  age  were  boys,  even  the  smallest  village 
had  its  wagon-maker,  its  harness-maker,  its  shoe-maker,  its 
cabinet-maker,  and  the  like  independent  mechanic-manufac- 
turers. In  the  process  of  the  country's  growth  in  wealth  and 
population  nothing  would  have  been  more  natural  than  the 
growth  of  these  small  manufacturing  shops  into  larger  ones, 
employing  more  apprentices  and  journeymen,  and  adding 
their  share  to  the  general  increase  of  local  activity  and  local 
wealth.  But  we  have  seen  no  such  growth  take  place.  On 
the  other  hand,  we  have  seen  all  this  multitude  of  small  man- 
ufacturing enterprises  perish.  Single  wagon  factories,  located 
two  thousand  miles  away,  devour  whole  forests  of  timber 
annually  and  ship  the  finished  product  back  to  the  region 
where  grows  the  timber ;  single  shoe  factories  in  New  Eng- 
land take  the  hides  of  the  Western  cattle  and  return  the 
shoes  across  the  continent  to  the  consumer ;  even  the  beef  and 
mutton  of  distant  states  must  go  alive  to  one  or  two  monopo- 
lies in  Chicago  or  Kansas  City  and  be  shipped  back  dressed 
to  the  region  from  which  it  came  before  the  local  butcher 


46  BIG  SHOPS  AND  LITTLE  ONES 

can  sell  the  meat  to  his  townsmen.  Every  form  of  manufac- 
turing has  been  concentrated  in  a  few  hands  and  located  in 
a  few  centers.  This  concentration  is  due  solely  to  one  cause 
— the  possession  of  favorable  freight  rates.  To  the  legal 
advantage  given  certain  manufacturing  interests  by  the  factor 
of  distance  haul  were  added  the  illegal  advantages,  which 
the  unscrupulous  were  always  ready  to  buy,  of  secret  rebates. 
But  without  any  secret  rebates,  the  same  result  would  have 
occurred,  in  less  aggravated  form,  by  the  action  of  the  dis- 
tance haul  factor  alone. 

It  may  be  urged  that  the  possession  of  improved  machin- 
ery, the  economy  of  large  production  and  the  power  of  sales- 
manship possessed  by  the  great  factories  are  the  true  reasons 
for  their  possession  of  monopoly.  The  obvious  reply  is  that 
in  the  beginning  the  great  factories  had  none  of  these  advan- 
tages, because  they  themselves  grew  from  small  beginnings. 
Granting  the  factor  of  business  acumen  and  enterprise  as  nec- 
essary to  success,  it  is  still  certain  that  among  all  the  thousands 
of  men  in  business  no  three  or  four  or  a  dozen  men  possessed 
to  themselves  a  monopoly  of  acumen  and  enterprise.  No, 
an  advantage,  legal  or  illegal,  in  freight  rates,  either  on  raw 
materials  or  fuel  or  the  finished  product,  spells  the  secret  of 
success  in  the  case  of  every  monopoly.  Take  shoes,  for 
instance.  There  are  five  million  people  on  the  Pacific  Coast 
who  wear  shoes.  There  are  thousands  of  cattle  to  provide 
hides.  There  is  bark  in  plenty  for  tanning  the  leather.  If 
there  is  a  shoe  factory  in  all  this  region — three  times  the 
size  of  France — I  am  not  aware  of  its  existence.  Why  is 
there  none?  Because  it  would  not  pay  to  manufacture 


BIG  SHOPS  AND  LITTLE  ONES  47 

shoes.  Why  would  it  not  pay?  Because  the  New  England 
manufacturers,  in  order  to  hold  the  market  would  sell 
cheaper  than  a  manufacturer  here  could  sell.  'How  is  that 
possible?  Because  the  Eastern  manufacturer  with  cheaper 
rates  on  fuel,  machinery,  much  of  the  raw  and  all  of  the 
finished  product,  can  reach  such  a  greater  population  in  the 
East  that  be  can,  in  a  pinch,  sell  to  his  Pacific  Coast  trade 
at  a  loss  long  enough  to  put  a  local  factory  out  of  business, 
and  despite  this  loss,  earn  a  profit  on  his  gross  business. 
It  is  not  that  the  New  England  manufacturer  can  ship  to 
Pacific  Coast  customers  cheaper  than  a  Pacific  Coast  manu- 
facturer could,  but  that  he  can  ship  to  and  from  all  populous 
Eastern  regions  cheaper  than  the  Western  competitor  can. 
So  that,  fundamentally,  the  control  of  the  whole  country's 
trade  is  given  to  the  Eastern  shoe  manufacturers  because  they 
have  the  freight  rate  advantage  in  the  most  populous  half 
of  the  country.  The  same  principle  works  in  every  line  of 
manufacturing. 

jNow,  then  let  us  suppose  that  the  freight  rates  on  fuel, 
machinery,  hides,  tanned  leather — on  everything  that  goes 
directly  or  indirectly  into  the  making  of  a  shoe — as  well  as 
the  rate  on  shoes,  were  flat  rates,  regardless  of  distance.  The 
manufacturer  on  the  Pacific  Coast  or  in  Texas,  or  in  Florida, 
could  meet  the  manufacturer  in  Massachusetts,  for  instance, 
on  equal  terms  in  every  city,  town  and  village  in  the  United 
States.  The  battle  then  would  be  one  of  business  skill  and 
quality  of  goods.  Is  it  not  evident  that  the  monopoly  of  the 
shoe  trade  would  pass  from  a  few  hands  to  many,  and  that 
independent  shoe  factories  would  spring  up  and  make  interest 


48  BIG  SHOPS  AND  LITTLE  ONES 

for  Capital  and  wages  for  Labor  all  over  a  great  territory 
where  such  an  industry  is  now  unknown? 

The  great  factories  would  by  no  means  have  to  close 
their  doors.  Their  monopoly  would  be  ended,  that  is  all. 
And  they  would  have  to  meet  real  competition.  If  they  con- 
tinued to  hold  trade  it  would  be  by  the  natural  healthy 
means  of  the  best  goods  for  the  lowest  price.  And  this 
would  mean  cheaper  shoes  for  the  American  people.  As  a 
result  of  the  general  increase  of  business  activity  in  all  lines 
and  the  general  increase  in  the  profits  of  capital  and  labor, 
there  would  be  an  increased  buying  power,  which  the  shoe 
trade  would  beneficially  feel,  and  it  is  quite  certain  that  the 
established  factories  would  find  a  profitable  bulk  of  business, 
while  new  competitive  factories  were  growing  up  elsewhere. 
It  is  true  that  a  given  quantity  of  business  can  only  be 
divided  into  so  many  quantities  of  certain  size,  but  the 
contention  for  the  Common  Rate  is  that  it  would  make  an 
enormous  increase  in  the  quantity  of  business  to  be  divided. 
My  belief  is,  and  it  is  not  one  carelessly  formed,  that  this 
single  factor  would  double  the  wealth-consuming  power  of 
the  United  States  in  ten  years. 

The  more  wealth  a  people  produce,  the  more  they 
can  and  will  exchange.  Business  is  the  exchange  of  wealth 
for  wealth — wheat  for  shoes,  for  instance.  Of  course, 
we  translate  the  transaction  into  terms  of  money,  but  money 
is  only  the  medium  of  exchange — a  mere  convenience  of  trade 
and  not  wealth  in  itself.  A  man  naked  and  alone  on  a 
barren  island,  with  neither  food,  water  nor  shelter,  would 
be  abjectly  poor  if  he  had  a  million  dollars  in  currency. 


BIG  SHOPS  AND  LITTLE  ONES  49 

Wealth  is  of  no  account  except  for  enjoyment,  and  nearly 
all  enjoyment  is  dependent  on  exchange.  Men  exchange 
capital  and  labor  for  wealth.  When  wealth  is  plentiful  it 
is  cheap.  Less  capital  and  less  labor  buy  more  wealth,  or, 
as  we  say,  Capital  earns  higher  interest  and  Labor  higher 
wages.  High  interest  and  high  wages  are  always  the  twin 
benefits  which  come  with  increased  wealth  production.  It 
is  remarkable  how  many  persons  there  are  who  fail  to  see 
this  plain  economic  truth.  Nothing  is  more  certain  or  more 
true.  Conversely,  when  wealth  is  scarce,  it  is  dear,  and  less 
wealth  buys  more  capital  and  labor,  i.  e.  dividends  are  lower 
and  wages  lower.  That  is  the  exhibit  of  so-called  panic 
times — curtailed  wealth  production,  decreased  dividends, 
lowering  of  wages.  The  trinity  are  inseparable. 

It  is  certain  that  increased  wealth  production  benefits 
Capital  and  Labor  and,  of  course,  makes  trade  active.  In 
common  talk,  the  more  we  make,  the  more  we  have;  the 
more  we  have  the  more  we  buy  and  the  better  we  live. 
It  is  remarkable  how  pithily  the  common  maxims  express  the 
laws  of  Political  Economy.  The  workman  says  to  his 
mate — "There  are  too  many  men  in  town  for  the  job." 
He  states  the  Law  of  Marginal  Supply  and  Demand  with 
exactness.  He  says  of  the  merchant  who  is  moving  heaven 
and  earth  to  increase  his  business:  "That  fellow  is  work- 
ing to  raise  his  rent."  Which  is  an  accurate  characteriza- 
tion of  the  "unearned  increment."  It  is  a  pity  so  many 
economic  writers  are  afraid  to  express  themselves  with  equal 
clearness,  common  sense  and  pithiness. 

The  effect  of  the  Common  Rate  then,  on.  manufacturing, 


5O  BIG  SHOPS  AND  LITTLE  ONES 

would  be  a  very  great  increase  of  demand  for  manufactures 
and  the  establishment  all  over  the  country  of  small  local 
manufactories  to  meet  this  increase.  Localities  possessing 
natural  advantages,  such  as  water-power,  convenient  coal  or 
raw  materials,  and  which  are  now  debarred  from  making 
use  of  these  advantages  by  prohibitive  freight  tariffs,  would 
become  the  seats  of  profitable  industries,  employing  the  home 
folk  and  increasing  home  trade  and  values.  --There  are 
thousands  of  such  potentially  capable  localities.  The  manu- 
facturers now  herded  in  the  cities  in  order  to  get  the  best 
freight  rates,  would  be  free  to  scatter  in  search  of  more 
naturally  advantageous  sites,  and  cheaper  rents.  This  would 
bring  about  a  decided  fall  in  city  rental  values — an  unmixed 
public  good,  since  a  fall  in  such  values  simply  means  that 
idle  Privilege  gets  less  and  Capital  and  Labor  get  more  of 
the  wealth  the  two  produce.  There  would  be  a  fairer  and 
a  much  more  widely  distributed  apportionment  of  profits. 
The  excessive  growth  of  the  cities  would  be  to  that  extent 
so  much  more  retarded  and  the  growth  of  the  small  towns 
and  the  attendant  rise  of  country  land  values  that  much  more 
accelerated.  The  consumer  would  buy  cheaper,  and  produc- 
ing capital  and  labor  would  have  more  profit,  because  con- 
sumers and  producers  would  share  between  them  the  share 
of  the  profit  which  speculative  land  values  now  take  in  the 
shape  of  excessive  rent. 

It  will  be  observed  that  with  whatever  form  of  activity 
or  line  of  business  we  begin  our  examination,  we  always 
find  the  outcome  of  the  Common  Rate  to  be  a  wider  distri- 
bution of  production,  an  increase  of  production,  an  increase 


BIG  SHOPS  AND  LITTLE  ONES  5  I 

of  demand,  a  decrease  of  cost  to  the  consumer  and  an 
increase  of  profit  to  the  producers,  Capital  and  Labor.  And 
this  is  uniformly  so,  because  the  present  unequal  and  unsatis- 
factory economic  conditions  in  every  line  of  human  production 
and  consumption  are  due  to  the  impost  levied  on  all  activity 
of  Capital  and  Labor  by  speculative  land  values  in  the 
shape  of  Economic  Rent;  and  these  speculative  land  values, 
again,  are,  at  present  and  for  many  years  to  come,  made  possi- 
ble by  the  inequality  of  transportation  rates. 

A  disease  may  declare  its  presence  in  a  hundred  different 
patients  by  a  hundred  different  symptoms,  but  the  physician 
knows  the  cause  is  identical  in  all  cases.  If  he  is  a  wise 
physician  he  treats  the  cause.  Our  political  doctors  have 
been  plastering  boils  and  putting  hot  water-bags  to  cold  feet 
and  administering  tablets  for  sick  stomachs  and  treating  the 
symptoms  of  the  body  politic  with  local  remedies  for  years, 
and  the  body  politic  is  still  sick.  Some  day  the  common 
sense  of  the  nation  will  administer  a  remedy  for  the  disease 
itself. 


The  Effect  of  the  Common  Rate  on  Mining 

JINING  is  the  third  of  the  three  prime  industries  of 
men.  It  is  a  very  great  industry  in  our  country. 
Upon  coal  and  iron  are  founded  the  bulk  of  manu- 
facturing enterprises  and  the  greater  business  of  rail- 
road construction  and  maintenance.  Upon  copper  we 
depend  for  the  transmission  of  electric  energy  and  the  per- 
formance of  a  host  of  minor  duties.  Upon  gold  men  agree 
in  believing,  at  least,  that  they  are  dependent  for  exchange 
tokens.  Silver,  lead,  zinc,  tin,  quicksilver,  antimony,  nickel, 
mica,  asbestos,  marble,  gypsum,  limestone,  phosphates,  borax, 
soda,  talc,  fullers'  earth — these  are  some  of  the  many  min- 
erals indispensable  to  modern  industries.  Oil  fills  a  very 
large  field  of  usefulness.  Beyond  doubt  the  business  of  min- 
ing is  equal  in  importance  to  the  business  of  agriculture 
or  that  of  manufacturing.  Let  us  now  consider  what  broad 
effects  the  Common  Rate  would  produce  in  this  necessary, 
extensive  line  of  wealth  production. 

For  several  years  the  writer  has  himself  been  interested 
in  the  mining  business,  with  the  result  of  accumulating  a 
fat  experience  and  a  slim  pocket-book,  and  his  ventures  in 
more  lines  than  one,  over  a  territory  reaching  from  Alaska 
to  Mexico,  have  brought  him  into  contact  with  many  men 
engaged  as  owners,  operators,  promoters  and  prospectors  of 
a  multitude  of  mining  enterprises.  Speaking  from  this  plat- 
form of  practical  experience,  he  is  certain  that  neither  agricul- 


54  BETTER  LUCK  TO  THE  MINER 

ture  nor  manufactures  are  so  directly  and  as  it  were,  at 
first  hand,  absolutely  dependent  for  permission  to  exist  upon 
freight  rates  as  are  any  and  all  mining  businesses.  The 
legitimate  mining  promoter — and  when  I  speak  of  mining 
promoters  I  refer  to  a  very  useful  class  and  not  to  the  gentry 
who  periodically  unload  wagonloads  of  wild-cat  stocks  on 
the  gullible  Eastern  public — the  legitimate  promoter,  before 
he  approaches  the  probable  investor,  will  inform  himself  as  to 
the  size  of  his  vein  or  deposit,  the  percentage  of  mineral  the 
rock  carries  and  dozens  of  other  items  of  inquiry,  but  he 
knows  that  the  first  question  he  will  have  to  answer  will 
be:  "What's  the  freight ?"  Until  that  question  is  answered 
acceptably,  it  is  useless  to  produce  maps,  analyses,  assays, 
mill  tests  or  engineer's  estimates.  It  is  never  "What  have 
you?"  but  always,  "What  will  it  cost  you  to  haul  to  market?" 
The  average  investor  knows  no  more  of  the  true  theories  of 
Political  Economy  than  the  average  banker  knows  of  the 
real  law  of  money,  which  is  a  very  negligible  quantity  of 
knowledge,  indeed ;  but  it  takes  no  other  knowledge  than 
that  acquired  in  the  school  of  hard  knocks  to  make  the  mining 
investor  certain  that  success  or  failure  depends  first  and 
last  on  the  cost  of  transporting  his  machinery  to  and  his 
product  from  his  mine. 

In  the  very  nature  of  things  the  great  majority  of 
mining  deposits  are  located  at  considerable  distances  from 
the  railroad  centers  where  favorable  freight  rates  are  to  be 
had.  Manufacturers  can  be  herded  at  convenient  strategic 
points,  and  large  agricultural  territories  are  apt  to  enjoy  some 
advantage  of  proximity  to  transportation  centers.  But  the 


BETTER  LUCK  TO  THE  MINER  55 

mine  is  usually  in  a  remote  district.  Its  output  is  subject 
to  a  long  haul.  Many  of  the  Western  roads,  if  not  openly 
hostile  to  mining  enterprises,  certainly  are  slow  to  grant 
payable  rates.  And  the  margin  between  the  rates  under 
which  a  few  favorably  situated  mines  can  operate  and 
the  best  possible  profit  is  so  narrow  that  hundreds  and 
thousands  of  really  valuable  mines,  less  favorably  situated, 
are  forced  to  lie  undeveloped.  This  is  true  even  of  such 
useful  products  as  iron,  oil  and  copper.  Not  infrequently, 
too,  there  are  "inside  interests"  in  both  manufacturing  and 
transportation  corporations  which  are  benefited  by  the  produc- 
tion of  one  group  of  mines  and  averse  to  the  development 
of  other  groups,  which  may  have  the  natural  advantage  of 
situation ;  and  here  the  freight  rate  is  brought  into  play  as 
a  staff  for  the  feet  of  the  one  and  the  club  for  the  head 
of  the  other.  But  whether  fairly  or  unfairly  used,  the  mining 
business  depends  from  first  to  last  wholly  upon  the  cost  of 
getting  to  market.  It  is  at  once  the  breeding  mother  and 
the  abject  bond-slave  of  the  railroad. 

I  am  persuaded  that  all  industries  would  be  benefited  by 
the  adoption  of  the  Common  Rate.  But  I  am  also  per- 
suaded that  no  great  group  of  industries  would  be  so  instan- 
taneously benefited  as  would  the  mining  group.  With  an 
equal  cost  of  transporting  machinery  and  an  equal  cost  of 
transporting  ores,  regardless  of  length  of  haul,  millions  of 
capital  and  thousands  of  men  would  hurriedly  be  put  to  work 
in  the  mountains  of  Colorado,  Montana,  Utah,  Wyoming, 
Idaho,  Washington,  Oregon,  California,  and  New  Mexico. 
Gold,  silver,  copper,  lead,  iron  and  coal  would  pour  in 


56  BETTER  LUCK  TO  THE  MINER 

abundant  streams  from  the  mine  mouths  that  are  now  closed. 
The  increase  of  wealth  production  and  of  buying  power 
among  those  engaged  in  agriculture,  manufacturing  and 
trade,  which  would  contemporaneously  take  place,  would 
provide  markets  for  the  increased  products  of  the  mines, 
and  the  needs  of  the  capital  and  men  employed  in  this 
revival  of  the  great  basic  industry  of  mining  would  again 
provide  markets  for  the  produce  of  the  farm  and  factory. 
It  is  impossible  to  say  how  far-reaching  and  how  great  the 
effect  of  a  great  revival  of  the  mining  industry  upon  all 
other  industries  would  be,  but  it  would  be  very  far-reaching 
and  very  great  beyond  a  doubt.  And  that  the  adoption  of 
the  Common  Rate  would  thus  stimulate  and  revivify  this 
industry,  any  man  fairly  acquainted  with  the  business  of 
mining  will  agree. 


The  Effect  of  the  Common  Rate  on 
Common  Carriers 

|N  THE  preceding  chapters  I  have  sketched,  in  out- 
line and  with  broad  strokes,  purposely  omitting 
much  detail,  the  effects  which  the  Common  Rate 
might  reasonably  be  expected  to  produce  upon 
speculative  land  values;  upon  Privilege  tolls  in  the  shape 
of  rent  and  unearned  increment;  upon  the  conditions  of  city, 
town  and  farm  life;  and  upon  the  profits  of  Capital  and 
Labor  productively  employed  in  agriculture,  manufacturing 
and  mining  and  the  kindred  activities  of  trade.  This  I 
may  be  allowed  to  call  the  opening  argument  in  the  case 
of  the  People  of  the  United  States  vs.  Privilege,  Based  on 
Freight  Favors;  and  I  call  this  the  opening  'argument 
because  I  have  followed  the  practice  of  the  lawyers,  who  first 
outline  their  case  in  general  terms,  and  afterwards  introduce 
specific  facts  in  evidence  to  support  the  argument.  This 
\*Lole  book  I  ask  to  have  regarded  as  precisely  such  an 
opening  address.  Specific  facts  and  evidence  in  abundance 
are  certainly  not  wanting,  but  I  prefer  to  leave  their  presenta- 
tion to  a  later  day  in  the  trial  of  this  great  issue  which  has 
now  begun,  but  assuredly  has  not  finished.  And  as  a  part 
of  this  same  opening  argument,  in  the  same  general  way, 
massing  conclusions  instead  of  segregating  a  multitude  of 
facts,  let  us  proceed  to  consider  the  probable  effect  of  the 
Common  Rate  upon  the  business  of  the  railroads  them- 
selves. And  first,  let  me  say  that  certainly  the  water-carriers 


58  THE  BEE  AND  THE  HONEY 

must  come  under  the  same  laws;  and  at  another  time  their 
case  will  be  discussed;  but  at  present,  since  jthe  great 
majority  of  the  people  do  their  shipping  in  cars,  this  argu- 
ment will  deal  with  the  railroads  as  if  they  were  the  only 
common  carriers  of  importance. 

I  have  no  sympathy  with  demagogic  denunciation  of 
railroads.  I  am  of  the  West.  A  boy,  I  knew  its  prairies 
when  the  buffalo  cropped  the  bunchgrass  and  the  Indian 
was  an  odoriferous  and  unpleasant  reality.  Mine  own  eyes 
have  seen  a  mighty  wilderness  blossom  and  fruit  under  the 
hand  of  the  husbandman;  have  seen  the  camp-fire  of  the 
trapper  give  place  to  the  smoke  of  the  farm-house  chimney, 
and  the  hunting  pasture  of  the  useless  savage  made  the 
homesteads  O'f  millions  of  thrifty  and  happy  folk.  And  all  this 
incredibly  wonderful  West  exists  solely  because  across  the 
plains,  the  streams  and  the  formidable  mountains  the 
Captains  Courageous  of  Transportation  graded  and  bridged 
and  tunneled  and  laid  their  lines  of  tie  and  rail.  Doubt- 
less in  those  formative  and  turbulent  days,  when  gigantic 
prizes  were  to  be  gained  or  lost  by  craft  and  violence,  when 
foolish  and  often  vindictive  legislation  was  met  with  any 
weapon  at  command — with  bribery,  evasion  or  defiance — 
these  men  did  many  things  that  were  evil.  But  they  did 
more  that  was  good.  The  evil  has  much  of  it  perished  with 
them,  but  the  good  they  wrought  stands  up  a  colossal  fact, 
a  towering  monument  to  their  high,  adventurous  valor 
and  their  intrepid  faith  in  themselves  and  the  future.  The 
men  who  put  their  lives  and  the  men  who  put  their  treasures 
into  the  building  of  our  American  railroads  deserved  their 


THE  BEE  AND  THE  HONEY  59 

rewards  of  power  and  money,  and  their  successors  deserve 
their  full,  fair  share  of  the  wealth  thus  created  and  being 
created.  If  it  were  in  my  power  to  fix  such  a  Common 
Rate  for  service  as  I  advocate,  neither  bond-holder,  nor  stock- 
holder, nor  railroad  chief,  nor  employe  should  suffer  loss  of 
profit  or  wage.  Surely  the  bee  deserves  to  eat  of  the  honey 
he  has  brought  home  to  the  hive. 

The  gross  revenue  which  American  railroads  will  derive 
from  freight  business  during  the  coming  year  will  be,  in 
round  figures,  about  two  billions  of  dollars,  and  for  this 
revenue  they  will  haul,  over  an  average  distance  of  one 
hundred  miles,  about  two  billion  tons  of  freight.  Now,  I, 
for  my  part,  would  be  cheerfully  willing  to  allow  the  rail- 
roads a  gross  payment  of  twTo  and  a  half  or  even  three 
billions  of  dollars  for  this  same  service,  if  they  would 
perform  it  under  the  regulations  of  the  Common  Rate.  The 
gross  gain  to  be  won  by  Capital  and  Labor  from  Privilege 
would  over  and  over  offset  the  extra  net  profit  of  the 
railroads.  And  the  extra  net  profit  of  the  railroads  would 
perhaps  not  even  then  be  the  full  share  of  the  gain  rescued 
from  Privilege,  and  fairly  due  to  the  enormous  capital  and 
numerous  labor  employed  in  the  useful  productive  function 
of  transportation  by  rail. 

It  is  a  certainty  that  the  great  increase  in  agricultural, 
manufacturing,  mining  and  trading  activity  will  be  followed 
by  a  corresponding  increase  in  freight  shipments.  Now 
there  is  a  seeming  paradox  known  to  all  railroad  managers: 
that  is,  the  ability  to  haul  freight  under  certain  conditions 
below  cost  and  still  make  money  by  the  operation.  It  is 


60  THE  BEE  AND  THE  HONEY 

on  the  principle  which  actuates  the  shrewd  merchant  when, 
at  the  season's  end,  he  sells  the  odds  and  ends  of  out-of-style 
goods  for  less  than  cost,  counting  any  money  got  as  so 
much  better  than  throwing  the  goods  out.  So  a  railroad, 
having  its  fixed  charges  and  its  freight  trains  to  be  moved 
anyway,  can  earn  money  by  getting  additional  tonnage  at 
less  than  the  average  cost  of  haul.  The  engine  and  engine 
crew  and  train  crew  must  go  anyway,  and  the  money  got 
for  freight  that  otherwise  would  ;not  be  shipped  is  so 
much  gain.  This  frequently  happens,  and  the  reason  is  that 
none  of  our  roads  is  worked  to  its  full  capacity.  There  is 
not  one  which  could  not  haul  more  freight  over  its  rails 
if  it  were  sure  of  being  offered  the  freight  so  as  to  prevent 
car-shortage.  With  new  farm  acres  being  cultivated,  with 
new  mines  being  worked,  and  new  manufactories  starting 
and  old  ones  increasing  output  to  meet  the  new  conditions 
'of  business,  there  would  be  a  tonnage  offered  which  would 
tax  every  road  to  its  limit  of  energy;  and  this  extra  tonnage, 
as  railroad  men  know,  is  the  source  of  profit. 

An  almost  certain  result  of  the  compulsory  adoption  of 
the  Common  Rate  would  be  the  combination  of  all  lines  of 
rail  and  water  transportation  either  in  a  gigantic  pool  or 
an  actual  consolidation  of  ownership,  directed  by  depart- 
ment chiefs,  responsible  to  a  governing  body.  Of  course, 
a  change  in  the  laws  would  be  necessary  to  the  legality  of 
this  desirable  end,  but  in  order  to  put  the  Common  Rate 
in  force  other  changes  than  this  must  be  made.  Politicians 
and  statesmen  have  been  busy  for  centuries  hampering  the 
natural  developments  of  trade  and  commerce,  but  it  is  satis- 


THE  BEE  AND  THE  HONEY  6l 

factory  to  know  from  the  mouth  of  history  that  the  laws 
of  economic  growth  are  always  too  strong,  in  the  long  run, 
to  be  held  in  subjection.  People  and  rulers  alike  stumble 
in  wrong  paths,  but  sooner  or  later  Economic  Law  takes 
both  alike  by  the  ears  and  sets  their  faces  in  the  right 
direction.  We  may  be  quite  sure  that  a  complete  standard; 
ization  of  all  rates  will  lead  to  a  consolidation  of  all  trans- 
portation corporations,  and  that  people  will  have  seen  the 
wisdom  of  such  a  proceeding  by  the  time  it  is  necessary. 

In  order  to  put  the  Common  Rate  in  force  this  general 
legislation  would  be  necessary: 

1.  A  statute  compelling  all  common  carriers  to  charge 
a  like  rate,  neither  more  nor  less,  for  hauling  a  like  weight 
of  like  goods  and  commodities,  regardless  of  the  length  of 
the  haul. 

2.  A   subsidiary   statute   providing   that    the   common 
carrier  to  whom  the  shipment  is  offered  shall  forward  that 
shipment  by  the  quickest  practicable  route  over  its  own  and 
connecting  lines;  and  compelling  the  acceptance  and  expedi- 
tious forwarding  of  the  shipment  by  the  connecting  line  or 
lines,    without    any    other    than    the    fixed    initial    common 
charge  to  the  shipper. 

The  classification  of  freight,  the  rates  to  be  charged 
and  all  similar  decisions  should  be  left  to  the  experienced 
intelligence  of  the  railroad  chiefs.  Self-interest  is  a  suffi- 
cient guarantee  that  they  would  not  make  rates  too  low 
to  pay  good  revenue  nor  too  high  to  prevent  revenue.  And 
the  laws  of  the  land  should  be  so  amended  as  to  encourage 
the  common  carriers  to  pool  their  managements  and  so 


62  THE  BEE  AND  THE  HONEY 

get  for  all  the  thousands  of  security-holders  a  practically 
level  share  in  the  profits  to  be  made  by  the  roads.  For  if 
the  Common  Rate  is  to  be  the  benefit  it  should  be  to  all 
business  and  all  wealth  producers,  we  will  then  have  to  get 
ourselves  into  the  attitude  of  wanting  the  railroads  to  make 
good  profits. 

The  economies  in  the  clerical,  tariff-making  and  freight 
soliciting  departments,  possible  under  the  operation  of  the 
Common  Rate,  would  be  a  very  large  item  of  net  revenue 
to  the  railroads.  And  the  disappearance  of  the  con- 
stant friction  with  individual  shippers  over  classification, 
alleged  favors  and  other  causes  of  protest  and  ill-feeling 
would  be  a  great  gain,  financially  and  morally.  The  sus- 
picion, dislike  and  frequent  hatred  directed  against  the  rail- 
roads is  appalling  in  bulk.  Unreasonable  these  sentiments 
often  are,  but  with  reason  or  without,  this  condition  of  the 
public  temper  is  a  very  real  source  of  discomfort  and  loss 
to  railways.  Almost  invariably,  the  bad  feeling  is  due  to 
either  an  actual  or  fancied  injustice  in  freight  charges — to 
actual  or  fancied  discrimination.  This  attitude  of  suspicion 
and  hostility  could  not  exist  with  the  Common  Rate  every- 
where in  force.  An  era  of  mutual  goodwill  between  shippers 
and  carriers  would  naturally  begin.  And  this  would  be  no 
small  advantage  to  the  railroads.  Divorced  from  politics, 
as  they  would  be — and  railroads  are  only  in  politics  because 
originally  forced  there  in  self-defense — and  relieved  of  any 
fear  of  popular  dislike  or.  legislative  disaster,  the  roads  could 
and  would  address  all  their  energies  to  the  great  task  of 
getting  the  wealth  of  the  nation  to  the  markets. 


THE  BEE  AND  THE  HONEY  63 

I  am  well  aware  that  the  tremendous  readjustment  of 
values  and  business  problems  I  advocate  could  not  possibly 
take  place  without  losses  in  some  directions,  and  heavy 
losses  among  the  speculators  in  land  values.  But  I  confess 
that  I  am  unable  to  see  how  the  holders  of  railroad  securi- 
ties, or  the  revenues  of  the  roads,  could  be  affected,  even 
temporarily,  in  any  other  than  a  beneficial  way.  A  meas- 
ure which  would  permit  the  railroads  to  increase  their 
gross  revenues  by  millions,  while  enabling  them  to  institute 
wide  economies  in  executive  and  clerical  work  and  in  the 
operation  of  trains  loaded  to  hauling  capacity,  and  at  the  same 
time  doing  away  with  the  necessity  for  hateful  and  expen- 
sive and  demoralizing  political  alliances  and  warfares,  seems 
to  me  to  come  carrying  in  its  hands  benefits  so  immense 
and  so  happy  that  they  far  outweigh  all  objections,  whether 
well  or  ill  taken.  No  man  can  be  more  fully  persuaded 
than  I  am  that  the  fair  profit  of  the  capital  and  labor 
employed  in  the  great  business  of  transportation  is  an  absolute 
essential  of  national  prosperity.  There  is  not  one  single 
activity  to  which  the  brain  and  hand  of  civilized  man  turn 
themselves,  no  matter  how  enormous  or  how  insignificant 
that  activity  may  be,  which  is  not  intimately  dependent  for 
profit  upon  the  prosperity  of  the  carriers.  It  is  the  recogni- 
tion of  the  basic  importance  of  this  factor  in  modern  life, 
as  the  regulator  of  all  values  and  all  profits,  that  perhaps 
distinguishes  this  treatise  from  any  other. 


The  Common  Rate  and  Business  Panics 

|HE  United  States  has  lately  experienced  a  panic,  to 
use  the  expressive  common  term.  So  far  as  surface 
appearance  went,  it  was  a  money  panic  alone,  and 
an  unnecessary  panic.  The  crops  were  abundant. 
Seed-time  and  the  summer  had  gone  and  the  harvests  had 
not  failed.  The  nation  was  at  peace,  within  and  without. 
No  enemy  threatened  her  gates,  and  there  was  no  murmur 
of  domestic  discontent  within  her  walls.  The  captains  and 
the  privates  of  the  allied  army  of  Capital  and  Labor  answered 
cheerfully  and  confidently  to  the  reveille  in  all  the  multitu- 
dinous camps  of  industry.  A  bank  failed  here,  a  trust 
company  there,  and  precisely  as  a  few  cowards  have  been 
know  to  stampede  thousands  of  brave  men,  with  arms 
in  hand,  and  send  them  scurrying  out  of  the  battle  in  head- 
long, shameful  fear  and  rout,  so  the  whole  array  of  money- 
owners  were  stampeded  in  a  wild,  ludicrous  and  disastrous 
scramble  for  hiding-places.  Everybody  ran  to  hoard  his 
currency  or  gold — the  bankers  first  and  far  in  the  lead. 
The  last  possible  dollar  was  withdrawn  from  use  and  put 
out  of  sight  in  bank-vaults,  safe  deposit  boxes  and  old  cans 
and  stockings.  These  were  the  exasperating  phenomena 
easily  seen ;  and  so  far  as  my  reading  goes,  the  unanimous 
opinion  of  the  public  prints  is  that  it  was  indeed  a  money- 
panic,  a  mere  senseless  exhibition  of  fear,  with  no  real  excuse 
for  occurring.  This  belief  is  wrong  and  arises  from  a  lack 
of  knowledge  of  the  real  cause  of  panics. 

You  may,  indeed,  succeed  in  frightening  a  nation,  just 
as  you  may  frighten   an  army.     (But  no-  mere  bugaboo   of 


66  THE  CAUSE  OF  PANICS 

fear  will  keep  an  army  or  a  nation  frightened  for  any 
length  of  time.  The  armed  host  that  keeps  on  running 
does  so  because  something  more  than  mere  fear  is  thundering 
at  its  fugitive  heels,  and  a  nation  that  is  in  business  distress 
for  months  and  years  must  look  for  another  cause  than  the 
momentary  scare  of  bankers  and  trustees.  The  cause  of  the 
last  panic  is  identical  with  the  cause  of  every  panic.  And 
the  panic  would  surely  have  come,  with  all  its  distressing 
features,  if  bankers  and  trustees  were  lions  instead  of  sheep. 
What  then,  is  the  cause  of  these  recurring  periods  of 
commercial  disaster  we  call  panics?  These  plagues  of  the 
business  world  return  again  as  regularly  as  the  physical 
plagues  which  once  recurrently  carried  death  and  woe  through 
the  streets  of  the  capital  cities.  The  superstition  and  igno- 
rance of  our  fathers  looked  upon  these  visitations  as  direct 
manifestations  of  a  very  choleric  Divinity,  and  scarcely 
dreamed  of  any  future  escape  from  Omnipotent  wrath, 
slaying  its  tens  of  thousands.  The  better  sense  of  today 
knows  that  just  plain  dirt  slew  the  victims.  Civilization 
no  longer  cowers  in  dread  of  the  pestilence.  It  is  rid  o<f 
that  horror.  And  the  one  difficult  achievement  was  to 
ascertain  the  cause.  The  rest  was  easy.  So  it  is  with 
these  plagues  of  business.  The  first  thing  necessary  is  to 
ascertain  the  cause  of  them.  And  assuredly  they  have  a 
cause.  No  phenomenon  appearing  with  considerable  fre- 
quency and  with  identical  features  is  any  creation  of  chance. 
The  panic  comes  because  at  some  time  and  in  some  way, 
during  times  of  prosperity,  we  make  things  ready  for  the 
coming  of  the  panic.  Now,  what  is  it  that  we  do?  What 


THE  CAUSE  OF  PANICS  67 

is  the  cause  producing  all  this  wreck  of  enterprise,  industry 
and  fortunes? 

This  is  the  cause:  During  the  prosperous  years  Privi- 
lege— Ecomomic  Rent,  if  the  term  pleases  better — progres- 
sively takes  larger  and  larger  toll  from  the  total  wealth 
production  of  Capital  and  Labor,  until  a  time  comes  when 
Capital  and  Labor  can  no  longer  pay  the  increased  toll  and 
earn  profits.  Then  Capital  and  Labor  cease,  in  a  large 
measure  and  over  wide  regions,  to  employ  themselves  until 
such  time  as  the  rent  toll  is  reduced.  The  interim  is  a 
season  of  acute  panic  and  subsequent  convalescence. 

We  see  what  happens  in  flush  times.  Speculative  land 
values  rise  with  great  rapidity.  On  the  outskirts  of  every 
city  and  town,  speculators  are  platting  additions  and  selling 
the  land  which  cost  them  last  week  a  thousand  dollars  an 
acre  at  a  price  this  week  of  five  hundred  dollars  for  a 
twenty-five  foot  lot.  Inside  the  city  and  town  limits  prices 
soar,  to  use  an  expressive  bit  of  slang,  like  balloons.  Every- 
body with  cash  or  credit  to  spare,  rushes  to  buy  and  boost 
prices  in  order  to  reap  speculative  gains — not  real  earnings. 
Farm  lands  share  in  the  general  speculative  rise.  Every- 
where the  price  of  land  goes  up  beyond  the  reasonable, 
conservative  limits  of  healthy  earning  power.  What  then? 
The  unhealthy  growth  of  speculative  values  not  only  attracts 
masses  of  active  capital  to  pure  idleness  in  the  shape  of  non- 
income-bearing  real  estate,  but  it  also  begins  to  feed  vora- 
ciously and  disastrously  upon  working  Capital  and  working 
Labor  in  the  way  of  universally  increased  rent.  Now, 
it  is  certain  that  Capital  and  Labor  can  only  pay  just  so 


68  THE  CAUSE  OF  PANICS 

large  a  share  of  the  wealth  created  by  them  for  the  oppor- 
tunity of  working  (which  is  what  they  do  when  paying 
rent),  and  when  the  inflated  land  values  reach  the  point 
where  they  must  have  more  toll  than  Capital  and  Labor 
can  pay,  there  is  a  smash.  There  must  be.  Inflated  rent, 
and  with  it  inflated  land  values,  must  be  reduced  or  produc- 
tion by  Capital  and  Labor  must  cease,  for  these  two  will  not 
work  without  profit,  and  excessive  rent  demands  the  whole 
profit  which  the  three  have  hitherto  shared.  Speculative  land 
values,  to  the  extent  to  which  they  are  speculative  and  not 
sound,  tumble  faster  than  they  rose.  Meantime  credits  have 
been  extended  all  over  the  country  on  these  false  values. 
Their  fall  destroys  confidence  in  securities  and  sends  the 
bankers  scurrying  to  draw  in  and  hoard  all  the  money  which 
they  can  compel  or  cajole  into  their  vaults.  The  panic  is  on. 
I  have  purposely  avoided  technical  exactness  in  this 
short  examination,  but  it  can  be  proven  with  mathematical 
exactness,  and  in  strict  conformity  to  all  the  canons  o<f  the 
most  orthodox  economic  teachers,  that  the  father  and  the 
mother  of  Panic  is  speculative  land  value,  engaged  in  extor- 
tion of  the  product  of  working  Capital  and  Labor.  Now 
the  solution  which  I  have  to  offer  for  the  fair  distribution 
of  all  wealth  production  will  put  an  end  to  this  extortion 
by  speculative  land  values,  and  consequently,  if  I  have  been 
hitherto  right  in  the  argument,  will  do  away  with  the 
seasons  of  business  distress  to*  which  our  people  seem  to  have 
resigned  themselves  with  as  little  wisdom  as  did  our  fathers 
to  the  visitations  of  the  pestilence.  I  affirm,  with  the  utmost 
confidence,  that  the  United  States  need  not  see  a  business 


THE  CAUSE  OF  PANICS  69 

panic  in  a  century,  if  its  people  will  resolutely  use  the 
simple  and  effective  means  of  the  Common  Rate  to  bit  and 
curb  the  cause  of  all  panics. 

Very  few  business  men  think  to  the  root  of  things. 
They  have  not  the  time.  Much  money-getting  calls  for 
the  incessant  use  of  a  man's  faculties,  and  much  thinking 
is  painful  and  tedious  labor.  Each  occupation  is  useful,  but 
no  man  can  successfully  engage  in  both.  The  man  who 
has  neither  the  training  nor  the  time  to  think  much,  must 
necessarily  take  his  opinions  at  second-hand.  I  think  it 
is  fair  to  say  that  the  business  men  of  this  country  do  so 
usually  obtain  their  opinions,  and  usually,  also,  from  the 
newspapers  and  popular  magazines.  Unfortunately  the 
newspapers  and  too  many  of  the  magazines  are  not  much 
given  to  sound  thinking.  They  are  written  almost  entirely 
by  reporters — the  finest  crop  of  reporters  ever  grown  under 
any  sun — alert,  witty,  entertaining,  mostly  honest.  But  they 
are  first,  last  and  all  the  time  reporters,  no  matter  if  they 
be  called  editors,  special  writers,  commissioners  or  what  not. 
To  hold  the  mirror  up  to  current  events,  to  be  the  exquisite 
reflection  of  the  passing  show,  that  is  the  achievement  aimed 
at,  and  admirably  accomplished.  But  if  one  were  to  inquire 
where  to  go  in  the  field  of  popular  publication  that  he 
might  find  independent  thought  and  sound  exposition  of 
basic  laws  of  social  evolution,  I  for  my  part,  would  be  at 
a  loss  to  answer.  This  is  not  said  in  either  scorn  or 
irritation.  It  is  a  statement  of  facts,  as  I  believe  the  facts 
to  be.  Naturally,  then,  the  business  men  of  the  country, 
in  the  mass,  are  not  able  to  fathom  the  reasons  for  such 


7O  THE  CAUSE  OF  PANICS 

phenomena  as  panics.  And  not  knowing  the  reasons,  and 
seeing  the  regular  recurrence  of  the  phenomena,  they  very 
generally  look  upon  these  disasters  as  inevitable,  and  come 
to  expect  their  arrival  with  the  resignation  due  to  an  act 
of  Providence. 

The  psychological  effect  of  this  general  assumption  of 
helplessness  in  the  business  mind,  acting  through  so  many 
millions  of  individuals,  is  decidedly  bad.  Instinctively, 
though  often  unconsciously,  the  men  engaged  in  production 
and  commerce  occupy  their  bases  and  formulate  their 
plans  of  campaign  with  this  factor  always  in  view.  It  has 
become  axiomatic  with  business  men  that  for  some  reason 
we  are  bound  to  have  about  so  many  years  of  flush  times 
and  then  so  long  a  period  of  depression,  and  this  results  in 
a  feverish  haste  to  do  the  last  possible  dollar's  worth  of 
business  while  the  sun  shines  and  to  run  with  the  utmost 
haste  at  the  first  sign  of  a  cloud  in  the  sky.  There  is 
no  question  that  this  state  of  mind  is  injurious  to  business 
as  a  whole.  An  essential  to  the  successful  conduct  of  a 
nation's,  as  well  as  of  an  individual's  business  affairs,  is  an 
abiding  confidence.  We  often  hear  it  said,  and  truly,  in 
times  of  depression  that  confidence  has  been  destroyed.  But, 
of  course,  they  err  who  propose  this  loss  of  confidence  as 
the  cause  of  the  depression.  The  lack  of  confidence  is  an 
effect,  not  a  cause. 

This  general,  uneasy,  injurious  fear  of  panics  to  come 
will  not  be  eradicated  from  the  business  mind  until  panics 
are  themselves  eradicated;  and  panics  will  not  be  eradicated 
until  the  cause  of  panics  is  eradicated.  If  during  the  years 


THE  CAUSE  OF  PANICS  7  I 

of  good  times  we  busily  sow  the  wind,  we  assuredly  will  not 
fail  to  reap  the  whirlwind.  And  as  I  have  pointed  out,  the 
wind  which  produces  the  panic  whirlwinds,  is  speculative  land 
value.  As  each  business  year  grows  better,  as  trade  and  pro- 
duction take  hope  and  exert  all  effort,  this  vampire  feeds 
fatter  and  fatter,  until  it  has  again  succeeded  in  draining  its 
victims,  and  drops  off  to  wait  their  recuperation.  A  regularly 
recurring  evidence  of  the  truth  of  this  proposition  is  furnished 
by  the  fact,  evjdent  to  the  dullest  eye,  that  panics  are  imme- 
diately preceded  always  by  exaggerated  real  estate  "booms." 

It  should  be  borne  in  mind  that  I  speak  only  of  specu- 
lative land  values — a  sound,  healthy  increment  of  land  values, 
provided  that  increment  were  generally  diffused  over  the 
country,  can  produce  no  disaster.  The  increment  of  value 
arising  from  use  of  land,  and  not  as  a  direct  or  indirect  result 
of  transportation  and  market  favors,  is  one  of  the  healthiest 
elements  of  national  prosperity.  With  the  Common  Rate  in 
force,  the  legitimate  and  widely  diffused  continuous  increase 
of  land  values  would  be  a  blessing,  since  it  would  not  be  the 
reward  of  speculation,  but  of  use.  As  land  values  are  now 
increased,  spasmodically  and  in  favorable  spots,  they  are  a 
curse  to  Capital  and  Labor,  a  blight  on  all  productive  industry 
and  a  benefit  only  to  the  gambler. 

I  use  this  word  gambler  advisedly — for  in  its  analysis 
speculation  in  land  values  is  exactly  on  all-fours  with  specu- 
lation in  stocks,  race-horses,  cards  or  roulette  wheels.  In 
ordinary  transactions  honest,  faithful  business  men  buy  and 
sell  and  exchange  for  mutual  profit — each  one  exchanging 
the  thing  he  needs  less  for  the  thing  he  needs  more.  That  is 


72  THE  CAUSE  OF  PANICS 

the  essence  of  fair  trade  and  sound  business.  But  the  man 
who  buys  land  to  sell  on  a  rise  in  a  day,  a  week  or  a  year, 
with  no  added  improvement,  simply  bets  with  the  seller  on 
the  future  market.  He  gambles  in  the  same  way  that  the 
man  gambles  who  goes  long  of  United  States  Steel  or  Amal- 
gamated Copper  or  wheat,  oats  or  cotton.  There  is  no  pos- 
sible element  of  usefulness  to  the  community  in  either  trans- 
action, and  the  morality  is  neither  any  worse  nor  any  better 
than  the  morality  of  betting  that  one  horse  will  lead  the  rest 
to  the  wire,  or  that  the  openers  in  your  hand  will  beat  the 
other  fellow's  five  cards. 

Now,  it  is  pretty  plain  that  money  used  in  real  estate 
gambling  does  not  produce  anything,  does  not  add  an  ounce 
to  the  national  wealth-production.  All  the  capital  so  em- 
ployed is  perforce  withdrawn  from  useful  production,  and 
just  by  that  much  is  the  production  and  the  consumption  of 
wealth,  and  the  profits  of  all  the  Capital  and  Labor  employed 
in  carrying  production  to  the  consumer — in  short,  all  agri- 
culture, mining,  manufacturing  and  trade — injured  by  being 
deprived  of  the  co-operation  of  this  capital.  The  gambler  is 
never  a  producer.  He  must  have  victims  to  provide  the 
money  for  the  game.  And  in  this  huge  real  estate  gambling 
game,  unlike  every  other  gambling  game,  the  ones  who  pro- 
vide the  winnings  are  not  the  players,  but  the  unwilling  on- 
lookers. Increased  rent  tolls,  levied  on  all  forms  of  industry, 
and  increasing  with  every  successful  bet  on  land  values,  pro- 
vide the  winnings  of  the  game.  Legitimate  business  pays  the 
stakes  and  is  not  even  allowed  to  hold  cards  in  the  game. 


Primary  Causative  Power  of  Transportation 
Rates 

HJBTLESS  many  who  will  be  ready  to  agree  that 
gambling  in  speculative  land  values  is  the  cause  of 
panics,  and  who  can  even  see  that  a  rise  in  specu- 
lative values  faithfully  means  loss  of  profit  to  work- 
ing Capital  and  Labor,  will  be  apt  to  think  it  a  far-fetched 
conclusion  that  inequality  of  transportation  charges  is  at  the 
bottom  of  the  whole  trouble.  They  will  honestly  doubt  that 
an  equalization  and  standardization  of  rates  can  possibly  end 
the  gambling  and  abolish  the  special  privileges  upon  which 
the  power  of  Rent  to  seize  the  goods  of  Capital  and  Labor  is 
founded.  Let  us  look  a  little  further  into  this  proposition. 
Let  us  see  something  more  of  the  actual  workings  of  this  all- 
permeating,  all-controlling  force  of  transportation  cost. 

Within  the  last  seven  years  [this  is  written  in  1910] 
there  have  been  built  in  the  lower  part  of  the  Borough  of 
Manhattan,  New  York,  twenty-six  buildings,  none  of  which 
is  less  than  two*  hundred  feet,  or  eighteen  stories  in  height, 
and  some  of  which  tower  to  an  altitude  of  six  hundred  feet. 
These  buildings  contain  a  rental  area  of  5,000,000  square  feet, 
or  about  116  acres,  of  perhaps  the  most  costly  space  in  the 
world.  Now,  what  has  made  the  profitable  erection  of  these 
buildings  possible?  What  has  made  it  practicable  to  rent 
floor  space  a  tenth  of  a  mile  above  the  ground?  One  sole 
thing — the  invention  of  the  passenger  and  freight  elevator — 


74  DEUS  EX  MACHINA 

vertical  transportation  of  persons  and  goods.  Take  away 
this  transportation  service  and  the  upper  stories  oi  these  sky- 
scrapers would  be  left  to  the  bats.  Is  it  far-fetched  to  class 
elevator  service  with  transportation  in  general  ?  Well,  these 
up  and  down  lines  in  the  twenty-six  buildings  mentioned  oper- 
ate one  hundred  and  sixteen  express  passenger  cars  and  the 
same  number  of  freight  cars,  a  total  of  two  hundred  and 
thirty-two  cars,  running  four  thousand,  five  hundred  miles 
every  eight-hour  day,  and  transporting  six  hundred  and  fifteen 
thousand  passengers  daily.  It  is  estimated  that  the  vertical 
lines  in  New  York  City  alone  are  equipped  with  twelve 
thousand  freight  and  nine  thousand  express  cars,  and  that 
they  transport  annually  two  thousand  million  passengers.  A 
service  of  that  magnitude  is  emphatically  entitled  to  rank 
high  in  the  list  of  such  services,  and  might  well  excite  emo'- 
tions  of  envy  in  the  heart  of  many  a  horizontal  railroad 
manager. 

\The  striking  feature  of  these  up  and  down  transporta- 
tion lines  is  that  they  furnish  service  free  to  all  alike.  But 
if  by  common  consent  they  were  all  to  charge  a  small  fare 
for  service,  that  would  affect  the  rental  capacity  of  the  build- 
ing as  a  whole,  but  would  have  no  effect  at  all  on  the  com- 
parative rent  charges  of  floor  and  floor.  These  would  rise  or 
fall  together.  Suppose,  however,  that  the  up  and  down  service 
were  free  to  the  tenth  story  and  cost  one  cent  above  that.  A 
penny  is  a  small  coin,  but  it  would  create  a  great  disturbance 
in  this  case.  Rental  values  of  the  upper  floor  would  rapidly 
fall,  and  if  the  location  of 'the  building  were  particularly 
desirable,  so  that  enough  tenants  must  perforce  do  business 


DEUS  EX  MACHINA  75 

there,  the  pressure  of  demand  for  space  on  the  lower  ten 
floors  would  create  a  rise  in  their  rental  cost.  Nothing  can 
be  more  certain  than  this  is  exactly  what  would  happen  if  the 
transportation  service  showed  an  inequality  of  charge  to  the 
amount  of  one  small  cent.  That  toll  of  one  cent  would  alter 
all  the  relative  values  of  the  different  floor-spaces,  would 
greatly  affect  the  ground  and  building  values,  and  would 
touch  the  fortunes  of  every  soul  doing  business  in  that  build- 
ing— some  to  gain,  some  to  loss,  some  to  bankruptcy.  Is  it 
not  clearly  reasonable  to  conclude  that  in  the  large  world  of 
industry  outside  one  building,  where  unequal  freight  tariffs 
actually  do  exist,  the  same  workings  of  cause  and  effect  occur? 
The  reader  may  depend  upon  it  that  they  do.  It  is  amazing 
that  the  all-powerful  effect  of  this  supreme  factor  in  the 
dynamics  of  wealth  has  been  completely  overlooked  by  the 
students  and  teachers  of  economy  and  statecraft. 

The  power  of  a  transportation  device  which  permits 
buildings  of  forty  stories  to  be  erected  and  rented  profitably 
on  a  small  lot  not  only  greatly  magnifies  the  selling  and  rental 
value  of  that  lot,  but  of  all  other  lots  favorably  located  for 
the  renting  of  so  much  floor  space.  The  up  and  down  car 
service  in  our  twenty-six  buildings  has  then  not  only  increased 
the  rental  value  of  the  lots  built  upon,  but  the  rental  value 
of  hundreds  of  lots  not  occupied  as  yet  by  sky-scrapers.  The 
increase  in  the  value  of  ground  rent  is  faithfully  reflected  in 
the  rise  of  building  rent,  and  the  increase  of  speculative  land 
values.  And  every  rise  in  rent  exaction  and  speculative  land 
values  is  another  tax  levy  on  working  Capital  and  Labor. 
The  owners  of  Privilege  benefit,  of  course,  and  so  does  that 


76  DEUS  EX  MACHINA 

capital  which  has  been  removed  from  productive  work  and 
hidden  away  in  land  bought  not  for  use  but  for  speculation. 
It  is  a  gross  injustice  that  non-producing  capital  should 
earn  more  than  producing  capital.  This  may  be  a  gain  to 
the  individual,  but  it  is  a  loss  to  the  whole  industrial  com- 
munity, and  the  community  is  foolish  to  permit  it.  Under 
modern  conditions  production  of  wealth — the  necessary  and 
good  things  of  life — can  only  take  place  on  any  scale  by  the 
joint  efforts  of  Capital  and  Labor,  and  every  bit  of  capital 
removed  from  active  production  takes  away  an  equivalent 
power  of  production  from  so  much  labor.  Now,  it  is  com- 
mon sense  that  capital  tied  up  in  idle  land,  waiting  a  rise  in 
selling  values,  produces  nothing.  So  far  as  production  and 
consumption — industry  of  all  kinds — are  concerned,  that  cap- 
ital might  as  well  be  buried  in  the  sea.  It  performs  not  one 
single  useful  service  for  the  common  good.  And  since  it 
does  get  gain  while  thus  lying  idle  and  useless,  it  is  apparent 
that  it  really  gains  by  preying  on  useful,  busy  capital  and 
labor.  For  it  adds  nothing  to  the  common  national  stock  of 
wealth,  and  it  can  only  get  gain  from  those  who  are  adding 
to  that  stock.  II  would  like  to  see  any  possible  refutation  of 
these  conclusions.  If  two  and  two  make  four,  then  a  man 
who  does  nothing  and  lives  well  is  a  parasite;  and  capital 
which  does  not  work  and  add  to  the  common  stock  of  produc- 
tion and  at  the  same  time  takes  wealth  from  that  stock  is  a 
parasite.  What  is  that  to  me,  or  to  you?  Well,  I  work 
to  help  produce  wealth ;  you,  perhaps,  add  your  capital  to  my 
work,  so  that  both  may  better  help  produce  wealth.  You 
and  I  take  the  ordinary  risks  of  life.  Each  after  his  ability, 


DEUS  EX  MACHINA  77 

we  perform  the  duty  of  a  man  and  a  citizen.  When  this 
other  idle,  useless  capital,  lying  in  wait  for  a  gambling  win- 
ning, wins  wealth,  it  takes  some  of  the  wealth  your  capital 
helped  to  produce  and  my  labor  helped  to  produce.  It  is  a 
thief.  And  since  it  is  everywhere  getting  continual  gains  it 
robs  you  and  robs  me  without  ceasing,  and  robs  all  business 
and  all  industry  until  it  brings  about  the  periodical  national 
bankruptcy  we  call  a  panic. 

Now,  what  tempts  men  to  take  capital  from  active,  use- 
ful work  and  put  it  into  idle  land-holdings? 

The  expectation  that  land  values  will  rise  fast,  and  show 
more  gain  than  capital  can  earn  at  the  work  of  production. 

Does  this  happen? 

It  does. 

What  makes  these  land  values  rise  in  this  way? 

The  pressure  of  population. 

What  causes  this  pressure?  Is  the  United  States  so 
small  in  extent  that  it  cannot  afford  room  for  all  its  people 
to  work  in? 

By  no  means.  There  is  land  to  spare.  There  is  land 
enough  in  one  single  state — good  land  enough  to  support  in 
comfort  all  the  people  of  the  United  States. 

Why,  then,  the  pressure  which  exaggerates  land  values? 

Because  it  is  directed  upon  certain  limited  territories. 

What  makes  these  territories  so  much  more  desirable  ? 

Easier  and  cheaper  access  to  markets. 

Is  this  access  a  natural  advantage? 

Not  at  all.     It  is  an  artificial  advantage. 

What  produces  this  advantage  artificially? 


78  DEUS  EX  MACHINA 

Inequality  of  transportation  rates,  which  are  based 
primarily  on  length  of  haul. 

What  would  happen  if  freight  rates  were  equalized? 

The  artificial  advantage  enjoyed  by  certain  restricted 
territories  would  disappear.  High  speculative  land  values 
and  rents  would  fall. 

Why? 

Because  the  pressure  of  population  would  disappear. 

Why? 

Because  Capital  and  Labor  could  exert  themselves  with 
equal  profit  over  so  much  vaster  territory. 

What  would  happen  to  the  millions  of  dollars  of  capital 
now  tied  up  in  idle  landholdings,  waiting  a  rise  in  speculative 
land  values? 

Some  of  it  would  be  badly  hurt.  The  rest  of  it  would 
get  busy. 

The  underlying  cause  of  all  the  varied  phenomena  of 
speculative  land  values,  non-producing  capital  getting  more 
gain  than  working  capital  at  the  expense  of  working  capital 
and  working  labor,  high  rental  costs,  low  interest  and  low 
wages,  unemployed  men  and  idle  lands,  recurrent  business 
panics,  you  then  say,  is  the  sole  factor  of  inequality  in  trans- 
portation cost? 

I  do. 

But  it  seems  such  a  small  cause  for  such  a  tremendous 
effect. 

Well,  the  scientist  tells  me  that  half  a  million  of  the 
bacilli  of  consumption  can  hold  a  caucus  on  the  point  of  the 
lead  pencil  I  hold  in  my  hand,  and  that  I  cannot  conceive  the 


DEUS  EX  MACHINA  79 

smallness  of  one  member  of  the  colony.  Still,  I  know  that  if 
he  found  a  congenial  lodging  in  my  lungs  that  it  would  mean 
sickness  and  death  to  me,  considerable  money  to  the  doctor, 
some  to  the  undertaker,  a  few  thousands  loss  to  the  insurance 
company,  a  fee  to  an  administrator,  and  directly  and  indi- 
rectly several  hundred  persons,  in  all  parts  of  the  habitable 
globe,  would  be  more  or  less  out  of  pocket  or  in  pocket 
because  a  thing  that  I  have  to  buy  a  powerful  microscope  to 
see  at  all,  got  into  a  lung.  It  is  not  the  size  of  any  cause  that 
gives  it  importance.  It  is  the  greatness  of  the  effects  of 
which  it  is  the  seed,  and  without  which  those  effects  could 
not  come  into  bearing  and  fruit. 

Men  are  prone  to  look  upon  an  effect  immediately  caus- 
ing the  final  effect,  as  the  real  cause,  when  in  truth  this  first 
effect  is  only  one  in  a  chain  reaching  back  to  the  prime  cause. 
They  are  not  trained  in  Bacon's  method  of  affirmatives  and 
negatives.  For  instance,  in  the  case  of  our  twenty-six  build- 
ings, one  might  urge  that  they  could  not  have  been  con- 
structed without  the  invention  of  steel-skeletons,  which  is 
true,  and  another  might  claim  that  such  edifices  would  be 
impossible  without  glass,  and  so  on  through  a  long  list,  and 
then  each  one  ask:  Why  not  attribute  the  credit  of  the  con- 
struction to  any  one  of  these  causes?  The  reply,  of  course, 
is  that  without  these  things  the  buildings  could  not  have  been 
erected;  but  that  while  with  them  the  buildings  could  be 
erected,  they  never  would  have  been  but  for  the  elevator. 
Men  erect  buildings  for  profit,  and  it  takes  no  wisdom  to  see 
that  the  upper  thirty  stories  of  a  forty-story  building  would 
never  be  rented  if  the  only  way  of  ascending  from  the  ground 


8O  DEUS  EX  MACHINA 

was  by  stairways.  /There  were  steel  and  brick  and  glass 
used  before  men  dreamed  of  office  buildings  higher  than  Trin- 
ity's spire.  The  elevator  was  not  one  of  the  many  necessary 
things — it  was  the  one  thing  that  made  tenancy  and  profit 
possible  in  lofty  buildings. 

It  is  this  proneness  to  mistake  a  cause  which  is  itself  only 
the  effect  of  deeper  cause,  for  the  primary  cause,  that  gives 
rise  to  so  much  stupid  legislation.  Thus  we  hear  it  repeated 
that  tariffs  are  the  mother  of  trusts,  when  it  is  absolutely 
certain  that  if  every  tariff  was  abolished,  just  as  many  trusts 
would  flourish  and  just  as  many  new  ones  spring  up,  so  long 
as  inequalities  in  transportation  rates  exist.  This  sort  of 
feeble  thinking,  too,  is  responsible  for  the  widespread  notion 
that  protective  tariffs  make  a  country  prosperous  by  keeping 
out  foreign-made  goods,  and  enabling  it  to  ship  more  wealth 
out  abroad  than  it  ships  in  from  abroad — a  fallacy  so  stupid 
that  the  mere  assertion  of  it  is  sufficient  commentary  on  the 
intellectual  caliber  of  the  utterer.  By  the  same  wisdom,  all 
that  a  city  need  do  to  outstrip  all  rivals  is  to  get  the  railroads 
to  refuse  to  transport  goods  to  it  and  handle  only  goods  it 
ships  out.  The  one  proposition,  stripped  to  its  final  analysis, 
is  on  all-fours  with  the  other.  It  is  a  shame  to  find  such 
childish  unreason  as  this  masquerading  as  statesmanship.  Pro- 
tective tariffs — by  which  sweet-sounding  name  is  meant  pro- 
hibitive tariffs — are  not  indeed  the  primal  cause  of  trust 
monopolies — though  they  lend  power  to  such  monopolies — 
but  they  are  efficient  agencies  in  maintaining  those  artificial 
inequalities  of  market  cost  which  unequal  freight  rates  breed. 
Unquestionably,  with  a  system  of  prohibitive  tariffs  and  with 


DEUS  EX  MACHINA  8 1 

our  present  system  of  freight  rates  varying  with  distance, 
the  nation  has  continued  to  grow  richer.  And  it  is  true  that 
there  are  men  able  to  read  and  write  who  point  to  this  fact 
as  a  justification  of  both  economic  schemes.  The  same  lucid 
reasoning  was  employed  by  the  friends  who  implored  the 
man  with  the  gout  not  to>  attempt  a  cure,  because  during  all 
the  years  he  had  suffered  with  this  interesting  complaint  he 
had  steadily  grown  richer. 

It  would  be  difficult  for  the  most  exuberant  fancy,  the 
most  powerful  imagination  to  picture  the  height  of  riches, 
power  and  productive  capacity  to  which  this  splendid  nation 
might  now  have  risen,  had  it  enjoyed  since  the  close  of  the 
Civil  War  free  room  for  the  play  of  its  enormous  creative 
faculties,  unhampered  by  the  clogs  of  prohibitive  tariffs  and 
the  far  greater  economic  crimes  committed  against  Capital 
and  Labor  by  Economic  Rent.  With  trade  free  to  seek  all 
its  natural  avenues  at  home  and  abroad,  and  every  form  of 
production  meeting  in  every  domestic  market,  far  or  near, 
on  precisely  even  terms;  with  the  pressure  of  population  dif- 
fused and  the  natural  increment  of  land  values  spread  over 
the  whole  vast  area  of  the  states — had  these  been  the  condi- 
tions of  forty  years  agone,  above  what  a  mighty,  puissant, 
prosperous  and  happy  people  the  dear  Flag  would  now  stream 
its  triumphant  folds! 


The  Farmer  and  the  Common  Rate 

class  of  citizens  would  quicker  perceive  the  bene- 
fits bound  to  inure  to  them  from  the  adoption  of  the 
Common  Rate  than  would  the  farmers.  To  every 
man  occupying  soil  in  the  useful  and  noble  work  of 
husbandry,  this  act  of  common  justice  would  come  with  its 
hands  full  of  blessings.  Nor  am  I  able  to  see  how  this  great 
class  of  highly  deserving  men  could  then  well  help  rising  to 
that  plane  of  dignity  and  prosperity  which  the  singular  use- 
fulness of  their  calling  entitles  them  to  occupy. 

The  average  American  farmer  is  a  fine  example  of  the 
natural,  wholesome  union  of  Capital  and  Labor  in  productive 
effort,  for  he  employs  his  own  capital  and  his  own  labor. 
When  he  owns  his  farm  in  fee  simple,  he  also  embodies  in 
himself  the  function  of  landlord  and  receives  himself  the 
economic  rent — that  is  to  say,  he  retains  the  amount  he  would 
otherwise  have  to  pay  for  the  use  of  land  equally  as  good  as 
his  own.  At  first  glance  it  would  seem  that  the  farmer  of 
his  own  land  would  therefore  be  little  interested  in  a  measure 
avowedly  aimed  at  high  rental  values.  But  it  is  only  neces- 
sary to  think  a  little  more  to  perceive  that  the  farmer  is  not 
only  a  producer  and  seller  but  also,  like  all  other  honest 
workers,  a  buyer  and  consumer;  and  that,  both  in  selling  his 
products  and  buying  other  products  in  the  market,  his  trans- 
actions are  affected  by  the  rental  values  of  the  great  market 
centers.  He  more  than  any  other  producer  pays  toll,  coming 
and  going,  to  the  favored  city  landlord.  For  it  should  never 


84  THE  TOLL  THE  FARMER  PAYS 

be  forgotten  that  while  the  pressure  of  population  raises  rental 
gains  to  extravagant  heights  in  certain  restricted  districts 
only,  these  gains  are  not  paid  entirely  by  the  inhabitants  of 
those  districts,  but  by  everybody,  everywhere.  The  high 
rents  paid  by  the  manufacturers,  commission  dealers,  ware- 
house men,  and  wholesale  and  retail  merchants  in  the  great 
market  exchange  centers,  are  faithfully  reflected  in  lower 
prices  for  the  farmer's  product  and  higher  prices  for  the  things 
he  must  buy.  The  difference  in  each  case  must  be  taken  by 
the  exchange  agent,  be  he  who  he  will,  in  order  to  pay  the 
high  rent  and  retain  a  living  profit.  Single  store-rooms  in 
the  city  of  Portland  rent  for  more  money  per  year  than  three 
good  farms  would  sell  for,  and  this  rent  is  not  all  paid  by 
the  people  in  Portland.  No,  indeed ;  every  farmer  in  Ore- 
gon whose  beef,  mutton,  poultry,  eggs,  milk,  hay,  wheat, 
oats,  fruits,  berries,  produce  of  any  kind,  finally  reach  this 
market,  helps  to  pay  these  high  rents.  If  he  will  but  consider 
this  truth  until  it  is  clear  to  his  understanding,  he  will  then 
readily  see  that  a  measure  which  will  knock  down  these  high 
speculative  rental  values  (and  the  Common  Rate  will  surely 
do  so) ,  is  bound  to  make  the  net  profits  of  the  farm  larger. 
And  it  follows,  that  if  his  net  profits  are  larger,  something  of 
increased  value  will  add  to  his  land,  no  matter  if  that  land 
be  situated  a  thousand  miles  from  the  city.  As  a  matter  of 
fact  the  inevitable  outcome  of  the  adoption  of  the  Common 
Rate  must  be  to  diffuse  the  land  values  and  rental  values 
around  city  centers  over  the  whole  area  of  the  United  States, 
including  of  course,  farm  lands.  This  is  the  desirable  result, 
in  the  train  of  which  the  general  good  is  to  follow. 


THE  TOLL  THE  FARMER  PAYS  85 

It  need  not  be  feared  that  the  cost  of  living  will  neces- 
sarily increase  because  the  profits  of  farmers  will  increase. 
The  cost  of  living  is  now  too  high,  altogether  too  high,  and 
yet  farmers  are  not  making  extravagant  profits.  The  mil- 
lions of  capital  anxiously  looking  for  profitable  employment 
are  not  madly  rushing  into  agriculture.  The  cost  of  living 
and  the  comparatively  high  gross — not  net — returns  of  the 
farmer  are  due  to  high  speculative  rental  values  which  con- 
tinually prey  upon  the  producer  and  the  consumer  alike.  I 
may  be  tedious  in  iteration  of  this  statement,  but  it  is  a  truth 
which  must  be  understood  by  our  people,  before  they  can  act 
intelligently  to  rid  themselves  of  the  evil.  We  may  resort 
to  every  political  makeshift  under  the  sun,  to  high  tariffs  or 
low  tariffs,  income  taxes,  corporation  taxes,  railroad  regula- 
tion, cheap  money,  "new  nationalism,"  or  what  not  of  the 
hundred  and  one  shallow,  catch-penny  devices  of  so-called 
statesmen,  and  to  what  use,  so  long  as  any  addition  to  the 
earnings  of  the  nation's  working  capital  and  working  labor 
is  regularly  and  automatically  taken  away  by  the  non-produc- 
ing thief — speculative  land  and  rental  values?  If  a  burglar 
comes  every  night  and  robs  my  safe  of  all  but  just  a  dollar, 
of  what  earthly  difference  is  it  to  me  that  some  "statesman" 
shows  me  how  I  can  put  a  few  extra  dollars  in  my  safe  each 
day?  Now,  this  is  strong  language,  but,  my  countrymen, 
this  is  exactly  what  is  being  done  to  you  every  day  of  every 
year.  It  is  a  bitter  commentary  on  the  intellectual  ability 
of  the  men  who  offer  themselves  as  guides  and  teachers  of  the 
people — our  political  writers,  Senators,  Representatives — 
conceding  them  to  be  honest  and  of  good  intention, — that  none 


86  THE  TOLL  THE  FARMER  PAYS 

of  them  sees  this  truth,  lying  plain  to  the  sight  as  a  big  stone 
on  a  traveled  highway.  For  it  is  the  truth,  and  no  wit  of  the 
most  cunning  sophistry  can  disprove  it.  It  may  be  reviled, 
and  men  who  embrace  it  may  be  subjected  to  all  the  abuse 
that  malignity  can  find  in  its  hateful  vocabulary,  but  there  it 
stands,  serene,  immovable  and  not  to  be  denied. 

I  do  not  mean  disrespect  to  rulers  and  those  we  have 
placed  in  authority  over  us.  I  was  taught  to  pray  for  them 
when  I  wras  a  child,  and  advancing  years  have  made  me  cer- 
tain that  they  are  very  proper  subjects  of  heartfelt  petitions. 
The  simple  fact  is  we  are  all  too  apt  to  be  dazzled  by  the 
glitter  of  high  place,  forgetting  that  the  places  are  always 
there  to  be  filled,  and  if  there  are  no  great  men  on  hand  we 
must,  perforce,  put  small  ones  in  the  seats  of  the  mighty.  An 
emphatic  lesson  of  history  is  that  all  governments,  monarchical 
or  republican,  are  simply  the  expression  of  the  average  opinion 
of  the  governed.  The  functions  of  legislation  are  in  essence 
limited.  Statutes  which  are  in  harmony  with  the  higher 
laws  of  political  economy  are  never  harmful.  Statutes  which 
controvert  those  higher  laws  are  always  mischievous.  And 
the  whole  story  of  government  for  a  thousand  years  is  one 
of  almost  constant  interference  with  the  economic  laws.  Yet 
in  each  generation  the  men  engaged  in  that  mischievous  and 
absurd  work  were  looked  upon  with  respect  and  even  awe. 
Certainly,  I  am  not  opposed  to  government.  But  I  refuse 
to  be  at  all  dazzled  by  ignorance  or  error,  no  matter  in  what 
pomp  of  apparel  or  of  place  they  appear.  We  have  had  Presi- 
dents, for  instance,  who  were  great  men — one,  the  greatest 
man  in  all  the  tides  of  time — honor  and  reverence  to  his 


THE  TOLL  THE  FARMER  PAYS  87 

deathless  name  and  fame! — and  we  have  had  Presidents  who 
with  difficulty  attained  to  respectable  mediocrity.  The  point 
I  wish  to  emphasize  is  that  those  who  see  the  truth  as  it  is 
here  presented,  do  not  permit  themselves  to  be  browbeaten 
from  its  acceptance  by  any  mere  show  of  superior  wisdom, 
or  by  the  sound  of  great  names.  Think  for  yourselves. 

It  seems  to  me  that  the  men  to  whom  this  chapter  is 
specifically  addressed — the  farmers — ought  to  be  peculiarly 
independent  in  thought  and  action.  The  life  of  the  farm  is 
not  apt  to  impart  many  of  the  outward  graces  of  dress  and 
manner  which  the  life  of  the  city  nurtures,  but  there  is  no 
avocation  under  the  sun  which  is  so  well  calculated  to  make 
strong,  right-thinking,  understanding  men.  I  want  the 
farmers  to  take  this  proposal  of  a  Common  Rate  seriously, 
to  talk  it  over  in  their  meetings,  to  discuss  it  at  the  store,  to 
think  it  over  at  home.  If  it  spells  prosperity  for  the  millions 
of  you  men,  it  spells  prosperity  for  the  rest  of  us.  Your 
profit  is  our  profit,  for  your  profit  will  come  by  binding  hand 
and  foot  the  robber  who  robs  us. 

Think  to  yourself  what  it  costs  you  to  send  the  stuff 
you  have  to  sell  to  market.  Maybe,  you  haul  only  a  few 
miles  to  the  nearest  railroad  station,  but  your  real,  actual 
market  is  the  place  where  your  product  finally  lands,  whether 
in  San  Francisco,  Chicago,  New  York  or  Liverpool — and 
you  pay  the  freight.  You  may  think  you  do  not,  but  you  do. 
It  comes  out  of  the  price  you  get  from  your  product.  Con- 
sider now  what  your  farmer  competitor  pays,  who  lives  one 
hundred,  two  hundred,  a  thousand  miles  closer  to  market. 
Consider  that  the  tariff  has  built  no  wall  about  your  industry 


88  THE  TOLL  THE  FARMER  PAYS 

and  that  you  compete  in  world  markets.  Then  ask  yourself 
this:  Is  it  fair,  is  it  justice,  that  I  plow  and  sow  and  reap 
and  do  all  the  work  to  raise  a  crop  that  my  fellow  farmer 
does,  and  get  less  for  my  work?  Not  only  that,  is  it  fair 
that  I  pay  more  for  my  plow,  for  my  machinery,  for  my 
family's  and  my  own  clothing,  furniture,  groceries,  hardware 
and  such  other  things  than  the  other  fellow;  does  who  gets 
more  pay  for  his  work?  And,  finally,  is  there  any  justice 
or  reason  in  both  of  us  getting  less  than  we  should  for  our 
crops  and  paying  more  than  we  should  for  our  necessities, 
because  the  landlords  in  cities  a  thousand  miles  away  raise 
rents  with  each  substantial  increase  of  population?  Ponder 
these  questions.  Get  hold  of  the  truth  firmly.  Then  hold 
it  fast  and  do  your  duty  to  yourself  and  to  your  country. 

My  own  personality  is  nothing — I  am  but  one  of  nearly 
a  hundred  million  plain  citizens.  I  am  quite  certain  that  all 
wisdom  did  not  appear  at  our  house  when  I  was  cradled  and 
that  it  will  not  die  when  I  do.  I  am  well  aware  that  there 
are  many  men  from  whom  I  can  learn  much,  and  learn 
thankfully,  in  any  department  of  human  knowledge.  And  if 
I  assume  a  dogmatic  tone  in  the  discussion  of  this  proposition, 
it  is  not,  I  hope,  due  to  arrogance  of  disposition  or  of  thought, 
but  to  a  profound  conviction  that  I  have  hit  upon  a  great 
and  vital  truth,  and  an  earnest  desire  to  have  my  countrymen 
see  that  truth.  I  was  born  in  a  little  rural  community — a 
farmer's  village.  I  know  the  farmer's  life  at  first  hand — I 
know  how  different  it  is  from  the  picture  of  poetical  fancy — 
and  if  it  is  to  happen  to  me  to  be  first  to  propound  an  econ- 
omic truth  which  shall  eventually  relieve  the  farmer  of  the 


THE  TOLL  THE  FARMER  PAYS  89 

injustice  which  he  knows  he  suffers  from,  without  perceiv- 
ing the  thing  that  robs  him,  the  few  years  that  will  fulfill 
the  span  of  life  for  me  would  be  filled  with  very  great  happi- 
ness and  thankfulness. 

You  men  who  feed  and  clothe  the  nation  ought  to  tire 
of  being  objects  of  prey  for  parasites.  You  ought  to  tire  of 
sweating  to  pay  tribute  to  capital  which  does  no*  useful  work 
and  to  the  rapacity  of  a  non-producing,  idle  and  utterly  use- 
less class  of  speculators.  You  ought  to  remember  that  you 
are  not  only  free  men,  but  that  you  are  the  majority  of  free 
men  in  a  free  country  where  votes  count.  If  you  will  not 
help  yourselves,  God  will  not.  He  has  more  deserving 
cases  to  look  after. 


For  the  Consideration  of  Single  Taxers 

BODY  of  citizens  who  should  quickly  and  clearly 
understand  the  immense  importance  of  the  Com- 
mon Rate  is  that  intelligent,  earnest,  thinking  class 
which  accepts  the  teachings  of  Henry  George. 
They  will  see  at  once  that  I  take  his  theory  of  Rent  to  be  the 
sound  theory.  He  was  a  very  great  man,  and  in  the  fullness  of 
time  will  come  to  his  rightful  high  place  in  the  estimation  of 
mankind.  But  in  spite  of  the  hopes,  and  even  the  claims, 
of  an  invincible  optimism,  the  doctrine  of  the  Single  Tax 
has  made  headway  slowly  in  this  country.  I  think  this 
is  due  to  several  causes.  ,For  one  thing  the  doctrine, 
carried  out  to  its  logical  application  of  the  confiscation  of  all 
private  ownership  in  land,  is  opposed  to  the  unbroken  tradi- 
tion and  custom  of  civilized  men;  tradition  and  custom 
which  had  their  birth  so  far  in  antiquity  that  history  knows 
nothing  of  the  date.  To  upset  custom  and  tradition  so 
venerable  and  so  universal  is  a  task  that  will  require  many 
more  years.  Again,  an  understanding  o-f  Mr.  George's 
teaching  requires  an  intellectual  training  which  most  men 
have  not.  To  the  multitude  it  is  a  hard  doctrine.  I  remem- 
ber when  Judge  James  G.  Maguire  ran  as  the  Democratic 
candidate  for  Governor  of  California,  he  was  bitterly  de- 
nounced on  account  of  his  well-known  Single  Tax  views, 
and  the  chairman  of  the  State  Press  Committee  of  the  oppos- 
ing party — an  excellent,  but  extremely  narrow  man,  with  no 


92  IN  THE  HOUSE  OF  FRIENDS 

trace  of  original  thinking  capacity  in  his  make-up — sent 
broadcast  over  the  state  the  assertion  that  Mr.  Maguire  pro- 
posed to  levy  all  the  taxes  on  the  farmers — and  the  foolish 
man  actually  believed  his  own  assertion.  The  other  can- 
didate was  a  lawyer  of  considerable  repute,  and  he  made  the 
same  statement,  and  he,  too,  believed  it!  These  are  but  two 
of  countless  examples  of  the  utter  inability  of  the  average 
citizen  to  understand  the  Single  Tax.  Now,  we  live  in  a 
world  through  which  progress  must  make  its  way  with  pain- 
ful slowness,  here  an  inch,  and  there  an  inch  forward.  For 
my  part,  I  am  an  opportunist.  A  half  loaf  of  bread  looks  to 
me  much  more  desirable  than  no  bread  at  all.  The  Common 
Rate  is  easier  of  understanding  to  the  multitude  than  the 
Single  Tax;  and  it  will  perform,  in  great  part,  the  func- 
tions of  that  economic  measure.  Its  adoption,  I  believe, 
would  hasten  the  adoption  of  Mr.  George's  plan,  for  both 
strike  at  the  same  evil  and  address  themselves  to  the  achieve- 
ment of  the  same  end.  Comrades  in  a  common  cause,  they 
march,  to  the  drums  and  fifes  of  the  vanguard  of  the  Army 
of  the  Common  Good,  against  the  common  enemy.  It  is  a 
righteous  war,  men  and  brethren,  in  which  we  are  enlisted. 
Let  us  go  up  to  the  battle  shoulder  to  shoulder,  loyal  and  true 
comrades-at-arms. 

I  have  asserted  several  times,  and  I  re-assert,  that  there 
is  no  actual  pressure  of  population  upon  our  lands — nothing 
but  an  artificially  created  pressure  brought  to  bear  upon  a 
very  small  portion  of  those  lands  by  a  system  of  unequal 
freight  tariffs.  For  how  can  ninety  millions  of  people  bring 
any  pressure  of  over-population  upon  a  billion  acres  of  cul- 


IN  THE  HOUSE  OF  FRIENDS  93 

tivable  soil?  There  are  now  in  actual  cultivation  in  the 
United  States  about  four  hundred  million  acres  of  land. 
There  are  enclosed  as  farming  land  about  four  hundred  mil- 
lions more,  not  actually  producing.  And  there  are  of  un- 
classified lands,  a  large  portion  of  which  are  cultivable  under 
modern  conditions,  more  than  a  billion  acres.  The  average 
of  production  over  the  area  actually  farmed  is  ridiculously 
small.  For  instance  our  wheat  lands  average  about  thirteen 
bushels  to  the  acre ;  those  of  France  twenty  bushels ;  those  of 
Germany,  twenty-eight  bushels;  those  of  England,  thirty- 
one  bushels.  As  a  matter  of  demonstrable  fact,  without  any 
other  scientific  knowledge  than  we  now  have,  the  cultivable 
lands  of  the  United  States  are  capable  of  supporting  a  popu- 
lation of  six  hundred  millions;  and  it  must  not  be  forgotten 
that  science  is  only  spelling  its  primer  lessons,  and  splendid 
as  its  achievements  have  been,  they  are  to  the  triumphs  to 
come  only  as  a  rushlight  to  the  sun  in  full  radiance.  I  have 
no  manner  of  doubt  that  our  descendants  will  see  a  billion 
people  living  in  this  country,  in  the  midst  of  such  wealth  and 
material  comforts  and  conveniences  as  we  now  no  more  dream 
of  than  did  our  fathers  dream  of  steamships,  railways,  electric 
cars,  lights,  telephones,  telegraphs,  automobiles,  aeroplanes, 
and  the  thousand  and  one  other  gifts  of  science  which  to  us 
are  commonplace.  The  agriculture  of  the  future  will  be  as 
different  from  the  agriculture  of  the  present  as  an  American 
plow  is  different  from  the  crooked  stick  with  which  the  hus- 
bandman once  scratched  the  soil  in  seed-time. 

I  think  it  is  evident  that  there  is  not  now  and  will  not 
be  for  generations  any  natural  pressure  of  population  upon 


94  IN  THE  HOUSE  OF  FRIENDS 

the  lands  of  the  United  States.  And  yet  a  pressure  of  popu- 
lation does  exist  and  manifest  itself  in  speculative  land  values, 
and  in  Rent  which  eats  up  the  honest  profits  of  Capital  and 
Labor,  and  so  fathers  and  mothers  nearly  all  our  economic 
ills.  It  is  evident  then,  again,  that  this  pressure  must  be 
artificially  produced,  and  if  that  is  so,  and  the  cause  is  not 
natural  and  a  part  of  the  operation  of  inflexible  natural  law, 
it  can  be  removed.  What  is  the  cause?  Lack  of  land? 
But  we  do  not  lack  land.  No,  it  is,  so  far  as  this  country 
is  concerned  surely,  the  restriction  of  the  very  profitable  use 
of  land  to  comparatively  small  districts,  in  which,  by  their 
very  smallness,  land  speculation  is  enabled  to  play  the  same 
part  it  plays  in  small  countries.  This  restriction  is  brought 
about  by  the  manipulation  of  transportation  costs.  Not  all 
the  riches  of  all  the  trusts  and  speculative  owners  combined 
could  maintain  the  high  speculative  selling  and  rental  values 
of  the  city  and  rural  acreage  they  actually  control,  if  all  the 
available  acres  of  this  vast  country  were  brought  into  compe- 
tition with  theirs  in  every  market  on  equal,  level  terms. 

We  are  apt  to  grossly  over-rate  the  comparative  propor- 
tions of  the  nation's  actual  and  potential  wealth  and  the  for- 
tunes of  very  rich  men.  Persons  will  often  speak  of  Mr. 
Rockefeller's  or  Mr.  Morgan's  ability  to  buy  up  the  whole 
country.  As  a  matter  of  fact,  Mr.  Rockefeller  could  not 
pay  the  hay  bill  of  the  country  for  a  year,  nor  the  corn  bill 
for  six  months.  It  would  bankrupt  him  to  pay  a  half-year's 
bread  bill.  The  barn-yard  hen  produces  more  wealth  in  a 
year  than  three  fortunes  of  the  size  of  Mr.  Rockefeller's 
produce  profits.  Mr.  Rockefeller's,  Mr.  Morgan's  and  Mr. 


IN  THE  HOUSE  OF  FRIENDS  95 

Carnegie's  fortunes  united  would  not  pay  the  freight  bill  of 
the  nation  for  twelve  months.  The  entire  capitalization  of 
the  Steel  Trust,  the  Oil  Trust  and  the  Copper  Trust,  at 
market  prices,  would  not  buy  the  produce  of  the  American 
farms  for  any  ninety  average  days.  In  the  light  of  these 
facts  it  is  clear  that  no  man  or  combination  of  men  could 
maintain  speculative  land  values  for  their  benefit,  if  the 
whole  immense  area  of  the  country  could  be  brought  into 
approximately  equally  profitable  use.  The  necessarily  more 
equal  diffusion  of  tax  burdens,  automatically  resulting  from 
the  more  equal  diffusion  of  land  values,  would  make  it  un- 
profitable to  hold  large  tracts  out  of  use,  in  expectation  of  a 
rise  in  selling  price,  because  that  rise  under  the  new  condi- 
tions would  be  so  slow,  on  account  of  being  so  general,  that 
capital  could  earn  more  by  being  put  to  the  work  of  useful 
production  than  it  could,  as  it  now  does,  by  lying  non-pro- 
ductive and  preying  on  production.  I  can  see  no  escape  from 
these  conclusions,  and  if  not  all  his  fiery  enthusiasm  and  indom- 
itable optimism  looked  forward  to  achieving,  they  are  in  sub- 
stance and  in  great  part  the  ends  to  which  Mr.  George  de- 
voted his  zeal,  his  eloquence,  his  efforts  and  his  undeniably 
great  and  original  mental  powers. 

Therefore,  I  earnestly  invoke  the  careful  and  deliberate 
consideration  of  the  proposal  of  the  Common  Rate  by  those 
intelligent  and  thoughtful  men  and  women  who  hold  to  and 
propagate  the  doctrines  of  Henry  George.  I  ask  them  to 
consider  the  practicability  of  this  economic  proposal ;  the  ease 
with  which  it  can  be  understood  by  plain  men ;  the  fact  that 
it  shocks  no  ancient  prejudices  and  comes  in  conflict  with  no 


96  IN  THE  HOUSE  OF  FRIENDS 

deep-rooted  traditions  and  customs;  the  fact  that  it  can  be 
put  in  operation  with  no«  change  in  any  of  the  governmental 
or  social  machinery  with  which  the  people  are  familiar ;  the 
fact  that  it  will  powerfully  appeal  to  the  farmer,  the  laboring 
masses  and  the  smaller  business  men  and  manufacturers  of 
the  country — and  considering  these  things  and  the  inevitable 
effects  upon  speculative  land  values,  I  ask  them  if  any  believer 
in  Mr.  George's  teachings  can  lend  himself  to  more  useful 
work  than  the  propaganda  of  the  Common  Rate.  And 
speaking  thus,  I  speak  as  a  friend  in  the  house  of  friends,  for 
as  I  was  not  among  the  slowest  to  believe  in  his  teaching 
and  doctrine,  so  I  shall  assuredly  not  allow  myself,  while 
I  live,  to  be  among  the  tardy  ones  to  voice  an  unshaken 
respect  for  the  patriotism,  the  devotion,  the  services  and  the 
genius  of  the  great  man  who  gave  to  the  world  the  "Progress 
and  Poverty." 


Some  Quotations  That  Seem  Pertinent 

|T  may  not  have  escaped  notice  that  I  indulge  in 
few  quotations  from  "authorities."  Truly,  I  care 
little  for  them  and  consult  them  seldom.  Let  each 
man  think  for  himself  and  Truth  will  find  her  own 
voice.  But  I  intend  that  this  shall  be  largely  a  chapter  of 
quotations,  by  which  I  desire  to  show  the  really  helpless  con- 
dition the  railroad  men  are  in,  the  power  of  habit  to  blind 
men's  eyes  to  the  remedy  for  troubles  they  clearly  discern, 
and  the  effects  that  rates  based  on  distance  have  on  different 
localities,  according  to  the  testimony  of  the  rate-makers.  I 
especially  ask  the  consideration  of  small  business  men — retail- 
ers of  merchandise — in  the  interior  towns  and  villages  to 
those  quotations  which  particularly  affect  them.  And  I  ask 
them  to  bear  in  mind  that  these  are  not  my  statements,  but 
the  utterances  of  men  who  confess  that  they  see  no  remedy 
for  the  ills  they  plainly  see.  In  one  sense,  these  quotations 
lack  sequence.  In  another  they  do*  not,  for  they  all  state 
evils  which  the  Common  Rate,  I  confidently  affirm,  would 
remedy. 

First  as  to  discriminations  in  freight  rates,  I  quote  from 
the  utterances  of  railroad  presidents : 

President  Galloway:  "We  do  not  do  these  foolish 
things  (rate  discrimination)  from  choice.  I  will  say  that 
they  are  just  as  bad  and  foolish  and  stupid  as  can  be,  but 


98  THE  WISDOM  OF  THE  WISE  MEN 

what  are  we  going  to  do  about  it?  We  have  built  up  these 
big  shippers  and  now  they  control  us." 

President  Ripley:  "The  situation  is  remediless.  I 
think  it  always  will  be." 

President  Hill:  "Discrimination  will  always  exist.  We 
have  to  discriminate." 

President  Fish:  "Tell  me  how  to  enforce  the  ten  com- 
mandments and  I  will  tell  you  how  to  stop  discrimination." 

President  Stickney:  "We  do  not  make  rates  on  cattle 
and  meat  products.  The  packers  make  rates." 

It  is  noticeable  that  none  of  these  railroad  men  defends 
discrimination  or  even  desires  it.  The  tone  of  each  one  is 
the  tone  of  a  man  disgusted  with  the  situation,  but  feeling 
utterly  helpless  to  remedy  it.  It  is  these  discriminations 
which  enable  big  shippers  to  put  smaller  men  out  of  business 
with  certainty  and  dispatch.  It  will  be  noticed,  too,  that 
the  railroad  presidents  admit  that  they  make  small  or  no 
profit  from  the  business  of  their  dictators.  In  fact,  in  the 
course  of  the  very  public  hearing  in  which  these  statements 
were  made,  President  Ripley,  of  the  Santa  Fe,  one  of  the 
most  powerful  railroad  systems  in  the  world,  declared  em- 
phatically that  the  Meat  Packers'  Trust  compelled  his  road 
to  haul  every  pound  of  their  beef  at  a  loss  to  the  road,  and 
that  he  was  powerless  to  help  himself.  Where  do  the  roads 
get  the  profit  then,  which  they  must  have  in  order  to  continue 
doing  business?  Let  us  see  what  others  say — men  who  can 
suggest  no  remedy,  but  see  the  facts — men  not  at  all  hostile 
to  railroads,  but  anxious  to  put  railroads  in  the  most  favor- 
able light. 


THE  WISDOM  OF  THE  WISE  MEN  99 

Hadley — Railroad  Transportation;  page  119:  "The 
points  where  there  is  no  competition  are  made  to  pay  the 
fixed  charges." 

Parsons — The  Heart  of  the  Railroad  Problem,  page  219: 
"The  railroads  make  whatever  rates  are  necessary  to  get  busi- 
ness on  the  through  routes,  and  compel  the  rural  districts  to 
pay  rates  high  enough  to  make  up  for  the  low  rates  on 
through  traffic." 

Senator  Dolliver — In  the  United  States  Senate:  "Every 
village  and  interior  community  in  the  United  States  has  a 
just  grievance  against  the  railroads  on  account  of  the  dis- 
criminations against  them  in  favor  of  the  larger  cities." 

Parsons — Heart  of  the  Railroad  Problem:  "Thus  every 
small  town  and  every  small  shipper  and  farmer  has  to  pay 
tribute  to  big  centers.  The  effect  is  to  build  up  the  big 
cities  at  the  expense  of  the  country." 

Ibid — (this  in  reference  to  the  low  through  rates — for 
which  the  interior  small  shippers  must  make  up — being  per- 
mitted by  the  Interstate  Commerce  Commission  on  the 
ground  that  the  railroads  must  meet  water  competition)  : 
"The  seacoast  is  robbed  of  its  water  transportation  and  the 
interior  pays  the  bill.  It  pays  the  cost  of  the  coast  trans- 
portation." 

And  now  this  choice  wisdom  of  the  august  Interstate 
Commerce  Commission : 

"The  men  who  build  a  city  in  the  interior  cannot 
expect  to  get  as  reasonable  a  rate  as  the  men  who  build  their 
city  on  the  shore  of  the  sea;  but  the  difference  should  be 
reasonable." 


IOO  THE  WISDOM  OF  THE  WISE  MEN 

I  think  our  grandchildren  will  likely  suspect  me  of  hav- 
ing forged  this  exquisite  bit  O'f  wisdom,  worthy  of  Bottom  or 
Dogberry  in  happiest  vein,  but  it  is  all  down  in  black  and 
white,  plain  for  any  man  to  see,  in  the  printed  decisions  of 
this  admirable  body  of  economists. 

And  now  let  me  quote  from  an  address  made  in  March, 
1905,  by  Federal  Judge  Peter  S.  Grosscup,  a  man  notor- 
iously favorable  in  all  his  rulings  to  great  corporations  of 
every  kind — railroads  as  well  as  Standard  Oil:  "Any  dif- 
ference in  rates  permitted  by  law,  even  though  based  on  the 
bulk  of  the  tonnage  handled  (the  learned  judge  is  trying  to 
say,  any  favors  given  to  big  shippers  at  the  expense  of  little 
shippers)  is  a  direct  and  effective  blow  by  the  nation  itself 
at  the  principle  that  every  man,  whatever  his  business  size, 
shall  be  given  equal  conditions  and  equal  opportunity." 

This,  of  course,  is  exactly  what  the  Common  Rate 
would  insure  to  all  men,  engaged  in  any  kind  of  production, 
whether  by  the  employment  of  capital  or  of  labor,  or  of  both. 
The  learned  judge  could  not  have  more  clearly  defined  the 
scope,  action  and  righteousness  of  the  Common  Rate  if  he 
had  known  all,  instead  of  nothing,  about  it.  And  now  in 
this  connection  another  bit  of  economic  wisdom  from  the 
Interstate  Commerce  Commission,  which  is  like  the  peace 
of  God,  in  that  it  passeth  all  understanding.  Several  rail- 
roads had  joined  in  making  a  common  flat  rate  on  milk 
shipped  in  cans,  regardless  of  distance,  and  the  milk  shippers 
nearest  to  market,  being  deprived  of  a  most  profitable  advan- 
tage, protested.  The  case  is  known  as  the  Essex  Milk  Pro- 


THE  WISDOM  OF  THE  WISE  MEN  IOI 

ducers'  Association  versus  Railroads,  and  this  is  the  finding 
handed  down  by  the  Interstate  Commerce  Commission: 

"A  blanket  rate  on  milk  on  all  lines  of  the  Delaware 
&  Lackawanna  road,  New  Haven  road,  Reading,  Erie,  New 
York  Central  and  West  Shore  and  other  roads,  regardless 
of  distance,  viz. :  32  cents  on  milk  and  50  cents  on  cream  per 
can  of  40  quarts,  is  unjust  to  producers  and  shippers  of  the 
nearer  points.  There  should  be  at  least  four  divisions  of 
stations — the  first  extending  forty  miles  from  the  terminal 
city ;  the  second  covering  a  distance  of  sixty  miles  and  ending 
one  hundred  miles  from  such  terminal;  the  third  covering 
the  next  ninety  miles ;  and  the  fourth  covering  stations  more 
than  190  miles  from  the  terminal."  (The  italics  are  mine). 

The  Commission  then  proceeded  to  fix  a  scale  of  rates 
so  graduated  that  the  freight  cost  of  forty  quarts  of  milk 
would  be  three  cents  higher  in  each  district  than  in  the 
district  immediately  next  nearer  to  the  terminal  market. 
With  the  decisions  and  law  findings  of  the  Interstate  Com- 
merce Cbmmission,  of  course,  this  work  has  nothing  to  do, 
but  the  assumed  economic  bases  of  its  remarkable  conclusions 
are  fair  game — though  this  is  a  merry  term  to-  be  applied  to 
such  painful  exhibitions  of  mental  obtuseness.  For,  in  the 
great  name  of  common  sense,  what  possible  "injustice"  could 
be  done  to  one  body  of  dairymen  by  the  roads  hauling  other 
dairymen's  milk  to  the  same  market  for  the  same  charge? 
I  confess  that  I,  for  my  part,  am  utterly  at  a  loss  to  compass, 
even  in  imagination,  the  processes  of  any  human  reasoning 
that  lead  from  such  a  premise  of  plain,  ordinary,  everyday 
justice  and  square-dealing  to  such  a  fearfully  and  wonder- 


IO2  THE  WISDOM  OF  THE  WISE  MEN 

fully  fantastic  conclusion.  Here  are  the  railroads  leading 
into  the  great  market  of  the  country  attempting  to  give  every 
man  in  the  dairy  business,  anywhere  on  their  lines,  a  fair  and 
level  opportunity  with  every  other  dairyman  to  set  his  milk 
down  in  the  market  place  at  exactly  the  same  cost — giving 
him,  again  to  quote  Judge  Grosscup,  " whatever  his  business 
size,  equal  conditions  and  equal  opportunities" — and  the 
Court  of  Last  Resort  in  transportation  matters  finds  that  this 
is  an  injustice.  Why  it  is  enough  to  make  common  sense 
throw  a  fit.  And  it  is  precisely  the  country-wide  application 
of  this  absurd,  illogical — I  was  about  to  say,  abominable — 
economic  injustice  to  all  freight  transactions  that  makes  you, 
Mr.  Farmer,  Mr.  Small  Merchant,  Mr.  Little  Shipper,  Mr. 
Busy  Capital  and  Mr.  Working  Labor,  get  up  early  and 
sweat  through  a  long  day  for  the  profit  of  the  "producers 
and  shippers  of  the  nearer  points" — to  quote  the  Honorable 
Commission. 

And  here  a  pertinent  quotation  from  a  matter-of-fact 
statistical  work,  Noyes'  American  Railroad  Rates:  "The 
statistics  show  that  while  freight  rates  on  an  average,  fell 
about  50  per  cent  in  30  years,  local  rates  have,  on  Eastern 
roads,  not  fallen  off;  and  on  Western  roads,  where  they  were 
much  higher,  about  10  per  cent." 

Which  is  to  say,  that  the  small  towns  and  rural  dis- 
tricts must  pay 'high  freights  in  order  to  build  up  the  big  city, 
enjoying  low  rates — thus  creating  gigantic  speculative  land 
values  that  make  a  few  square  inches  of  city  land  worth 
more  than  an  acre  of  a  fertile  farm. 

And    now   some   instances,    which    are    but   epitomized 


THE  WISDOM  OF  THE  WISE  MEN  IO3 

quotations  from  historical  and  statistical  works  of  recognized 
standing,  to  show  the  far-reaching  effects  of  a  freight  rate 
to  the  disadvantage  of  one  point  and  the  benefit  of  another. 

The  soil  and  climate  of  Italy  are  well  adapted  to  the 
cultivation  of  Indian  corn.  At  one  time,  says  D.  A.  Wells, 
Indian  corn  was  extensively  grown  in  Italy,  but  about  1880 
the  corn  grown  on  the  then  cheap  lands  of  the  Mississippi 
Valley  obtained  transportation  rates  which  enabled  it  to  be 
sold  in  the  Italian  markets  cheaper  than  corn  could  be  brought 
to  those  markets  from  Lombardy  and  Venetia,  where  wages 
were  but  one-third  American  farm  wages.  This  condition 
resulted  in  the  emigration,  in  the  year  1885  alone,  of  77,000 
Italian  laborers  to  the  United  States.  Note  that  this  was 
the  pressure  of  population  being  diffused  by  action  of  a 
freight  rate  favoring  a  larger  territory. 

According  to  a  United  States  Consular  Report  in  1886, 
the  speculative  selling  and  rental  value  of  land  in  Germany 
had  fallen  to  one-half  the  values  of  1871,  because  cheaper 
freight  rates  were  enabling  the  wheat-growers  of  the  United 
States,  Canada  and  Argentine  Republic,  to  land  wheat  in 
Germany  cheaper  than  it  could  be  grown  there  on  lands  de- 
manding the  former  high  rents.  Here  we  have  the  factor 
of  a  few  cents  in  the  bushel,  difference  in  a  freight  rate  on 
one  single  commodity,  destroying  in  a  dozen  years  half  the 
rental  value  of  an  empire — with  most  beneficial  results  to 
Germany,  as  can  easily  be  seen  by  anyone  who  reads  her 
history  since  that  period  with  seeing  eyes. 

The  opening  of  the  Suez  Canal,  as  is  well-known,  had 
almost  revolutionary  effects  upon  the  trade  and  commerce 


104  THE  WISDOM  OF  THE  WISE  MEN 

and  agriculture  of  Europe.  A  curious  isolated  effect  shows 
the  extraordinary  power  of  a  freight  rate  to  lower  rent  values 
and  diffuse  pressure  of  population.  Previous  to  that  great 
event,  rice  culture  flourished  on  the  Italian  peninsula,  and 
rice  lands  brought  the  owners  large  income  from  their  tenants. 
But  with  the  cheaper  canal  transportation,  Indian  rice  came 
into  European  markets.  The  Italian  rice  lands  could  no 
longer  earn  any  profit  for  the  capital  and  labor  employed  in 
cultivating  them  and  pay  the  high  rents.  Two  results  rapidly 
occurred — a  lowering  of  rent  and  an  emigration  of  laborers 
to  less  crowded  lands  in  America. 

Such  instances  could  be  multiplied  into  a  thousand 
volumes,  to  prove  by  historical  facts  the  dominant  power  of 
transportation  rates  to  make  and  unmake  all  speculative  land 
values.  A  powerful  illustration,  on  a  gigantic  scale,  is  at 
hand  for  anyone  who  will  consider  the  relative  status  of 
speculative  land  values  in  our  own  country  and  in  Manchuria. 

Manchuria  possesses  a  temperate  climate,  a  soil  of  great 
richness,  a  favorable  strategic  location  among  world  markets, 
an  immense  wealth  of  precious  and  useful  minerals.  Her 
wheat  lands  yield  nearly  twice  the  average  yield  of  Dakota 
lands,  and  it  is  estimated  that  all  these  lands  could  produce 
annually  five  hundred  million  bushels  o>f  wheat.  There  is 
nothing  wanting  in  Manchuria  to  make  it  as  wealth-pro- 
ductive as  the  richest  territory  under  our  own  flag,  except— 
what?  Population?  Capital?  Labor?  No.  Transportation 
— railroads.  Population,  employing  capital  and  labor  upon 
the  rich  land  opportunities  is  of  course  necessary,  but  popula- 
tion will  not  come  to  do  this  thing  until  transportation  first 


THE  WISDOM  OF  THE  WISE  MEN  IO5 

comes.  And  here  let  me  remark  that  it  is  the  peculiar  dis- 
tinction of  our  great  American  railroad  construction  chiefs 
that  they  first  saw  this  truth  and  acted  upon  it.  Until  the 
advent  of  such  truly  great  men  as  Henry  Villard  and  James 
J.  Hill,  upon  the  stage  of  world  activities,  transportation 
facilities  had  crawled  in  the  slow  wake  of  population,  rudely 
and  painfully  diffusing  itself  along  lines  of  natural  communi- 
cation— rivers,  lakes  and  stretches  of  level  country  affording 
passage  to  -the  wagons  and  ox-carts.  With  that  large  imagina- 
tion which  is  the  hall-mark  of  constructive  genius,  these  men 
put  transportation  where  it  belonged — in  the  van  of  popula- 
tion. They  built  railroads  across  thousands  of  miles  of  un- 
inhabited lands,  ending  at  seaport  villages.  The  result  is 
history,  splendid  history — the  most  splendid  history  man  has 
ever  made.  Now,  when  another  Villard  or  another  Hill 
shall  do  for  Manchuria  what  has  been  done  for  Western 
America,  the  same  results  will  follow — a  rapid  increase  of 
agricultural  population,  a  rapid  rise  in  selling  and  rental 
values  of  farm  lands ;  a  concentration  and  congestion  of  popu- 
lation at  the  market  points  most  favored  by  freight  rates; 
an  accelerated  and  enormous  rise  in  selling  and  rental  values 
of  land  at  these  points,  and  the  whole  phenomena  of  the 
earlier  high  profits  of  capital  and  labor  being  gradually  ab- 
sorbed by  speculative  land  values  and  rent.  And  all  this 
towering  edifice  will  rest  on  the  one  sole  foundation  stone 
of  inequalities  in  freight  transporation  rates.  If  there  is  any 
possible  escape  from  this  conclusion,  I  would  be  humbly  glad 
to  be  enlightened  upon  the  subject.  For  I  can  see  none, 
nor  do  I  believe  there  is  any. 


The  Power  of  a  Rate  Illustrated 

N  illustration,  on  a  very  large  scale,  indeed,  of  the 
power  of  transportation  rates  to  affect,  for  good  or 
for  ill,  the  lives  and  fortunes  of  an  entire  people  is 
found  in  the  recent  history  of  the  Kingdom  of 
Spain.  The  annals  of  that  brave  and  capable  people  for  three 
hundred  years  have  been  one  long  tragedy — a  tragedy  which 
no  good  man  can  contemplate  without  pity  and  compassion. 
The  victims  of  a  heartless,  greedy  and  stupid  tyranny,  both 
political  and  ecclesiastical,  generation  after  generation  of 
Spaniards  have  been  born  and  lived  and  died  in  mediaeval 
conditions  unknown  to  any  of  those  European  States  over 
which  once  the  valor  and  capacity  of  Spain's  soldiers,  seamen, 
scholars  and  traders  spread  the  terror  and  renown  of  her 
formidable  name.  For  centuries,  under  the  incubus  of  super- 
stition and  misgovernment,  the  people  of  the  Iberian  Penin- 
sula have  been  sunk  in  sloth,  in  poverty  and  in  an  almost 
incredible  ignorance  of  the  progress  of  mankind.  At  the 
close  of  the  Nineteenth  Century,  the  Spaniard  was  still  the 
Spaniard  of  the  days  of  Philip  and  Elizabeth.  The  husband- 
man still  furrowed  the  earth  with  an  implement  little  differ- 
ent from  that  used  by  the  Moors.  The  transportation  lines 
and  equipments  of  a  great  part  of  the  kingdom  were  still  the 
bridle-paths  and  the  mule  trains.  Still  the  royal  tax-collectors 
levied  impost  on  every  conceivable  product  of  industry,  and 
still  a  horde  of  cowled  monks  and  friars  swarmed  in  the  land 


IO8  THE  LUCK  OF  A  NATION 

and  exercised  the  authority  of  the  Middle  Ages.  Spain  was 
a  gigantic  and  mournful  anachronism. 

Twelve  years  ago,  either  an  accident  or  a  crime  in  the 
harbor  of  Havana,  brought  this  ancient  and  decrepit  kingdom 
face  to  face,  in  the  arena  of  war,  with  the  United  States.  It 
was  a  pitiable  spectacle — much  such  a  spectacle  as  would  be 
furnished,  could  we  see  some  suddenly  resurrected  knight  of 
old,  in  armor  clad,  riding  full  tilt  at  a  battery  of  rapid-fire 
gatlings.  There  could  be  but  one  result,  and  the  guns  of 
Dewey  and  Sampson  spoke  only  a  foregone  verdict  of  victory. 
The  conclusion  of  the  war  saw  Spain  stripped  of  her  colonies, 
without  a  fleet,  with  a  bankrupt  treasury  and  a  sullen  and 
disheartened  people.  The  day  the  treaty  of  peace  was  signed, 
the  best  of  the  Spanish  bond  issues  sold  on  the  bourses  and 
exchanges  for  49  cents. 

Ten  years  from  that  day  the  same  bonds  sold  for  90 
cents;  the  foreign  trade  of  Spain  had  increased  twenty  per 
cent;  the  mines  of  Spain,  long  renowned  for  their  potential 
wealth,  were  being  worked  with  feverish  activity;  great 
stretches  of  idle  land  were  being  brought  under  cultivation ; 
the  vineyards  and  olive  groves  were  being  extended,  and  an 
exhibition  of  a  new  spirit,  totally  unknown  to  that  country, 
of  hopefulness  and  energy  was  everywhere  so  much  in  evi- 
dence as  to  excite  the  comment  of  all  intelligent  travelers. 

What  brought  about  this  happy  and  beneficent  change? 
What  Jin  rubbed  the  rusty  lamp  of  Spain's  long-forgotten 
luck  and  enterprise? 

Now,  mark.  Out  of  the  annual  revenues  of  $216,000,- 
ooo — an  enormous  sum  to  be  raised  among  a  people  so  poor — 


THE  LUCK  OF  A  NATION  I(X) 

the  government  by  some  unusual  and  happy  visitation  of  com- 
mon sense,  set  aside  a  subvention  for  lines  of  steamers.  This,  of 
course,  was  giving  the  Spanish  exporter  and  importer  an  ad- 
vantage in  transportation  rates  across  seas  over  those  peoples 
served  by  unsubsidized  lines.  In  ten  years,  Spain  had  built 
up  an  importing  and  exporting  trade  with  the  Argentine 
Republic  of  $18,000,000  annually;  with  Uruguay,  of  $13,- 
000,000;  with  Paraguay,  of  $3,000,000;  with  Mexico,  of 
$6,000,000;  and  in  spite  of  the  total  loss  of  an  annual  ex- 
porting and  importing  trade  with  Cuba  and  the  Philippines, 
amounting  to  $70,000,000,  had  actually  gained  in  the  total 
amount  of  her  annual  over-seas  business  the  great  sum  of 
$30,000,000.  A  bit  of  sensible  legislation,  in  the  midst  of  in- 
credible government  stupidity,  gave  Spain  a  transportation 
advantage  over  rivals  for  the  trade  of  the  thinly  settled  Latin 
American  countries,  and  with  the  waving  of  this  magician's 
wand,  her  people  rose  from  the  exhaustion  of  defeat  in  war 
and  the  handicaps  and  miseries  of  clerical  and  aristocratic 
tyranny,  and  took  on  such  energy  and  such  prosperity  as 
neither  they  nor  their  fathers  had  known  in  three  hundred 
years  of  national  life.  If  Spain  can  retain  this  advantage  for 
her  ships  and  traders,  her  industrial  and  moral  regeneration 
is  as  certain  as  the  rising  of  the  sun. 

I  challenge  any  man  to  lay  finger  on  one  single  other 
cause  of  this  new  birth  of  energy  and  hope  in  Spain.  I 
affirm  that  all  the  people  of  Spain  have  won  for  themselves  in 
ten  active  and  happy  years,  from  the  increase  of  the  fortunes 
of  the  more  opulent  to  the  additional  coppers  in  the  muleteers' 
pockets,  is  directly  due  to  the  dominating  and  fructifying 


IIO  THE  LUCK  OF  A  NATION 

power  of  a  freight  advantage  indirectly  obtained  within  these 
ten  years  by  a  single  wise  act  of  legislation.  The  people 
of  Spain  are  hard  taxed  and  still  very  poor,  but  the  money 
taken  from  their  earnings  to  buy  the  freight  advantage,  is 
money  well  spent. 

I  do  not  intend  to*  be  dragged  into  any  controversy  over 
protective  tariffs  and  ship  subsidies — though  protective 
tariffs  seem  to  me  the  maddest  freak  of  human  unreason  ever 
exhibited  for  the  amusement  of  the  laughing  Gods.  But  with 
this  example  provided  by  Spain  in  mind,  I  cannot  refrain 
from  saying  that  if  we  were  to  lay  out  in  the  purchase  of 
ocean  transportation  advantages  one-tenth  of  the  two  thou- 
sand millions  of  dollars  which  we  annually  pay  to  the  bene- 
ficiaries of  prohibitive  tariffs,  the  increase  in  our  world's  trade 
would  go  far  to  make  up  the  gigantic  loss  incurred  by  our 
submission  to>  this  other  economic  robbery.  In  paying  a  ship 
subsidy,  we  get  on  a  national  scale  the  rebate  advantage,  by 
the  unscrupulous  use  of  which  so  many  colossal  private  for- 
tunes have  been  piled  up.  We  buy  openly  and  with  no 
wrong,  a  freight  cost  advantage,  and  anyone  who*  has  done 
me  the  compliment  to  follow  my  argument  thus  far  will  see 
that  any  nation  using  this  advantage  to  the  limit  of  its  resist- 
less power,  will  leave  its  trade  rivals  behind  in  the  race  for 
supremacy.  If  this  nation  were  deliberately  to  take,  annually, 
from  its  treasury  enough  millions  to  permit  our  own  vessels 
to  carry  ocean  freight  cheaper  than  the  vessels  of  any  other 
nation,  the  American  flag  would  fly  thick  in  every  port  of 
call  in  the  world ;  and  if  the  choking  hand  of  the  protective 
tariff  were  forced  from  the  throat  o>f  commerce,  American 


THE  LUCK  OF  A  NATION  III 

trade  would  dominate  the  world.  For  no  wit  of  man  can 
devise  any  successful  defense  against  the  irresistible  might  of 
the  most  favorable  transportation  charge. 

I  think  that  the  Japanese  are  the  least  sentimental  and 
the  most  logical  and  acute  people  on  earth.  They  are  using 
this  powerful  weapon  of  freight  cost  advantage,  bought  out- 
right with  subsidies,  to  conquer  the  commerce  of  the  Pacific, 
and  their  victory  is  being  won  as  rapidly  and  completely  as 
were  their  astounding  military  triumphs  over  the  armies  and 
fleets  of  Russia.  If  we  do  not  soon  awake  to  some  sense  of 
the  dominance  in  all  human  affairs  of  this  Law  of  Favorable 
Rate,  Japan  will  have  us  on  the  hip.  She  is  playing  with  us 
for  a  far  more  gigantic  stake  than  she  wagered  with  Russia, 
and  she  is  playing  with  her  eyes  open  and  we  with  our  eyes 
shut.  The  few  millions  with  which  she  buys  her  freight 
advantage  would  not  have  paid  a  month's  cost  of  her  great 
war — perhaps  not  a  week's  cost — and  the  triumph  she  will 
achieve,  if  our  stupid  folly  persists,  will  be  such  commercial 
dominion  and  empire  as  not  even  Napoleon  proposed  to 
achieve. 

It  may  be  said  that  this  has  little  to  do  with  the  Com- 
mon Rate.  I  reply  that  it  has  every  thing  to  do  with  such 
an  argument.  For  the  Common  Rate  is  advocated  to  destroy 
freight  favors  at  home,  because  they  build  up  the  fortunes  of 
the  favored  ones  in  spite  of  any  and  all  resistance;  and  the 
favorable  rate  is  advocated  abroad,  because  it  will,  just  as 
certainly,  build  up  the  fortunes  of  a  nation  as  of  an  indi- 
vidual ;  and  while  at  home  I  am  for  favors  to  none  and 


112  THE  LUCK  OF  A  NATION 

fair  opportunity  to  all,  in  the  great  commercial  war  of  the 
nations  I  am  for  my  own  people  and  my  own  flag. 

We  are  potentially  the  richest  and  most  powerful  people 
ever  grouped  together  in  all  the  tides  of  time.  Skill,  en- 
ergy, raw  material,  exquisite  machinery,  executive  force,  a 
working  class  of  unexampled  intelligence  and  initiative, 
courage,  optimism — nothing  of  the  elements  of  might  and 
dominion  are  wanting.  And  yet,  when  the  trumpets  are 
calling  the  nations  to  the  bloodless  war  for  trade  dominion, 
we  run  to  hide  behind  walls  of  protective  tariffs,  skulk  like 
cowards  who  hang  on  the  rear  of  battle  to  rob  the  helpless. 
Our  battleships  fare  forth  with  all  the  courage  and  blithe 
dare-deviltry  of  our  race,  and  no  man  dreams  that  they  will 
turn  from  fight.  But  our  commercial  fleets  hide  in  domestic 
ports,  and  sneak  but  occasionally  into  the  harbors  where  goes 
in  and  out  the  world's  trade. 

My  hope  and  faith  in  the  operation  of  the  Common 
Rate  is  that  by  the  very  exuberance  and  pressure  of  the  trade 
prosperity  it  would  create  at  home,  we  would  be  forced  to 
throw  down  the  senseless  bars  we  have  put  up  between  our- 
selves and  the  world  and  take  our  victorious  place  in  the  van 
of  the  nations.  Statesmanship  that  takes  the  thousand-year- 
old  tactics  of  China  as  its  model  of  wisdom  is  a  thing  which  I 
believe  five  years  of  the  Common  Rate  wTould  knock  on  its 
stupid  head. 

We  taught  Spain  a  useful,  though  painful  lesson.  It  is 
not  incredible  that  we  may  learn  a  profitable  lesson  in  turn 
from  one  of  her  gallant  and  successful  efforts  to  redeem  her 
fortunes  during  the  past  decade. 


The  Common  Rate  Would  Standardize  Prices 

THINK  it  needs  no  argument  that  the  Common 
Rate  would  standardize  the  selling  prices  of  all 
commodities  and  goods  everywhere.  That  must  be 
evident  at  a  glance  to  anyone.  With  every  seller 
of  wool  and  cotton  and  silk  and  thread  and  buttons  and 
needles  and  sewing  machines  meeting  every  other  seller  and 
buyer  of  these  things  in  any  and  all  markets  on  level  terms, 
it  is  as  certain  as  anything  can  be  that  the  buying  and  selling 
price  of  any  grade  of  clothing  will  be  the  same  everywhere. 
So  with  foods.  So  with  everything  men  buy  and  sell.  Prices 
would  find  their  level  as  automatically  as  does  water.  I  take 
it  that  there  will  be  no  denial  of  this  proposition. 

Now  it  seems  to  me  that  with  prices  thus  brought  to  a 
fixed  level,  all  business  would  enjoy  a  feeling  of  security 
of  capital  invested,  and  permanence  and  certainty  of  profit, 
that  it  never  has  had  and  cannot  now  possibly  have.  A  busi- 
ness failure  under  such  circumstances  could  hardly  occur, 
were  the  most  common  prudence  used.  And  even  a  bank- 
rupt's stock  of  goods  would  lose  little  of  its  value  as  a 
security  for  the  creditors.  For  it  would  certainly  find  a  mar- 
ket somewhere  at  the  prevailing  price  level,  minus,  perhaps, 
one  additional  freight  charge  assessed  at  the  Common  Rate. 
The  element  of  chance  in  business  success  today  is  the 
luck  or  ill-luck  in  guessing  at  future  fluctuations  in  prices. 
Essentially  this  is  as  much  a  gambling  element  as  is  the  guess 


114  WHY  LIVING  COSTS  MORE 

at  the  winning  throw  of  the  dice  or  the  lucky  number  in  a 
lottery.  A  good  guess,  when  buying,  makes  the  merchant 
a  winner ;  a  bad  guess  makes  him  a  loser.  And  this  gamble  is 
forced  upon  him  willy-nilly.  He  has  no  option.  He  must 
take  the  chances  of  the  future  market  price  every  day,  or  go 
out  of  business.  Now,  any  element  of  gambling  chance  in 
business  is  a  bad  element,  because  whoever  takes  gambling 
chances  of  any  kind  must  have  a  losing  streak  occasionally, 
and  may  have  too  many  for  his  safety.  True,  in  the  long  run, 
business  men  can  usually  balance  losses  by  greater  gains,  but 
the  uncertainty  is  always  there,  and  to  provide  against  it  a 
general  slightly  higher  selling  price  is  asked  than  would  be 
if  all  losses  and  all  profits  could  be  accurately  forecast. 

Again,  the  losses  and  gains  in  the  fluctuations  of  prices — 
good  times  and  bad  times — are  not  sustained  equally  by  all 
parties  to  the  transaction.  Rent,  which  takes  so  large  a  por- 
tion of  the  wealth  exchanged  in  business,  shares  in  all  the  gains 
and  stands  none  of  the  losses.  It  is  the  first  thing  to  go 
up  when  business  begins  to  show  good  earning  power,  and  it 
never  comes  down  when  business  shows  loss,  unless  forced 
to  do  so  by  widespread  virtual  bankruptcy  of  all  business — 
that  is,  in  times  of  severe  panic  depression.  And  then  it 
lowers  its  toll  as  reluctantly  and  slowly  as  it  possibly  can. 
While  the  victim  has  a  drop  of  blood  left,  the  vampire  clings 
to  him.  Now,  when  a  man  sits  in  a  gambling  game,  with  the 
understanding  that  he  provides  the  stakes,  and  pays  all  losses 
himself,  and  divides  all  winnings  with  an  onlooker,  he  can 
tell  very  easily  before  he  begins  to  play,  how  he  will  come 
out  at  the  end.  These  are  homely  illustrations,  but  I  think 


WHY  LIVING  COSTS  MORE  1 1 5 

they  will  make  my  point  clear.  Fluctuations:  in  buying  and 
selling  prices  hurt  Capital  and  Labor  engaged  in  producing 
and  trading,  and  benefit  Rent.  That  can  be  accurately  dem- 
onstrated theoretically ;  and  in  actual  business  life  every  man 
engaged  in  buying  anything  except  land  values,  knows  from 
experience  that  it  is  true. 

Again,  fluctuations  of  prices,  which  cannot  be  accurately 
forecast,  shorten  credits  and  so  curtail  business  power.  Evi- 
dently, less  credit  can  be  extended  on  the  security  of  a  stock, 
the  future  market  value  of  which  is  uncertain,  than  on  a 
stock  which  has  a  permanent  level  value.  Whenever  there  is 
a  margin  point  of  possible  speculative  loss  of  value,  the 
creditor  always  assumes  it  to  be  the  lowest  possible,  and 
bases  the  amount  of  credit  he  will  extend  on  the  assumption. 
But  with  prices  standardized  and  on  permanent  levels,  the 
marginal  credit  point  would  naturally  be  near  the  standard 
level  of  values.  The  business  man  could  thus  at  all  times 
know  his  capacity  to  obtain  credit,  and  this  assurance  would 
enable  him,  with  confidence,  to  extend  his  lines  to  his  full 
capacity  and  do  more  business  and  earn  more  profit  than  he 
now  can.  For  no  business  man  need  be  told  that  credit  is 
capital  and  that  an  enlargement  of  credit  is  equivalent  to 
an  enlargement  of  his  buying  cash  on  hand.  This  enlarge- 
ment of  credit  among  millions  of  men  doing  business  every- 
where in  the  United  States  would  add  enormously  to  the 
working  capital  of  the  nation,  thus  enabling  the  employment 
of  a  corresponding  amount  of  labor,  and  the  creation  of  a 
fresh  consuming  power  to  use  up  the  new  and  old  wealth.  In 
plain  American,  business  would  be  better  and  better.  Of 


1 1 6  WHY  LIVING  COSTS  MORE 

course,  there  are  elements  of  business  success  which  cannot 
be  bought  or  sold  or  brought  under  rule.  They  go  with 
the  personal  equation.  Sagacity,  kindliness,  executive  force, 
appreciation  of  public  tastes — all  these  things  are  powerful 
factors  and  all  are  part  of  the  man.  I  do  not  claim  that  a 
standardization  of  prices  would  make  all  business  men  equally 
successful  or  prevent  all  failures.  God,  not  freight  rates, 
makes  men.  But  I  do  claim  that  such  a  standardization 
would  present  equal  opportunities  to  all — and  no'  man  can 
ask,  or  ought  to  ask  more  than  that.  A  square  deal  all 
around,  and  may  the  best  man  win — that  is  the  manly 
American  sentiment. 

Putting  buying  and  selling  prices  on  permanent  levels 
would  be  another  form  in  which  the  Common  Rate  would 
pare  the  claws  of  Rent.  Experience  shows  us  that  no  matter 
how  violently  prices  fluctuate,  they  invariably  tend  to  settle 
on  slightly  higher  levels.  Deep  down  at  the  root  of  things, 
this  is  because,  as  I  have  pointed  out,  Rent  takes  the  win- 
nings of  a  rise  and  refuses  to  pay  the  losses  of  a  fall  in 
prices.  As  a  matter  of  common  experience,  the  prices  of  all 
the  necessaries  of  life  have  risen  at  least  fifty  per  cent  in  a 
few  years.  This  has  been  accomplished  by  a  series  of  gradual 
rises  to  higher  levels,  accompanying  price  fluctuations.  Now, 
I  ask  the  merchant  if  he  is  making  fifty  per  cent  more  profit 
on  sales  of  these  necessaries,  and  of  course  he  says  he  is  not 
— and  he  says  the  truth.  I  ask  the  farmer  if  he  is  making 
fifty  per  cent  more  profit,  and  he  says  he  is  no>t.  The 
manufacturer  says  the  same  thing.  They  all  speak  the 
truth.  Yet  the  consumer  is  paying  fifty  per  cent  more. 


WHY  LIVING  COSTS  MORE  117 

Where  does  the  excess  cost  go?  In  whose  fingers  does  it 
stick?  It  goes  to  Rent,  speculative  land  values — the  idle 
capital  in  that  sure-thing  game — it  gets  it  all.  During  the 
last  few  years  the  selling  price  of  a  lot  in  your  city  has 
likely  doubled  several  times.  You  can  point  out  property 
which  has  risen  in  value  from  $100  to  $1,000,  possibly 
$5,000  a  foot.  You  could  have  leased  that  lot  ten  years  ago 
for  $200  a  year.  Now  a  lease  would  cost  you  $10,000  a 
year.  There  is  where  the  extra  cost  of  everybody's  living 
has  gone.  The  little  capital  originally  buried  in  that  lot  has 
never  worked  an  hour  since.  It  has  not  added  a  cent's  work 
to  the  total  stock  of  production.  It  has  not  helped  consume, 
has  not  bought,  sold  or  employed  labor  or  exercised  one 
single  useful  function  of  any  kind ;  and  yet  it  has  earned  more 
money  than  your  equal  capital  and  all  your  labor  honestly 
and  usefully  employed  during  those  years.  Do  you  see  now 
who  gets  the  profits  of  continually  increasing  cost  of  living? 
Do  you  see  what  Rent  does  to  Capital  and  Labor?  Well, 
when  the  Common  Rate  knocks  these  speculative  land  values 
on  the  head  and  Rent  ceases  its  mischievous  robbery,  the 
cost  of  living  will  rapidly  fall;  the  prices  of  all  necessaries 
will  be  much  lower,  and  yet  the  producer  and  the  trader 
will  have  more  net  profit  for  the  work  of  their  capital  and 
labor.  The  business  man's  and  the  farmer's  and  the  manu- 
facturer's gross  gains  will  be  decreased,  but  their  net  gains 
will  be  increased.  And  when  the  Common  Rate  has  thus 
reduced  Rent  extortion  and  reduced  prices  of  products  to 
common  levels,  those  levels  will  strongly  tend  to  be  per- 
manent over  long  periods. 


1 1 8  WHY  LIVING  COSTS  MORE 

I  appeal  to  any  thinking  business  man,  engaged  in  use- 
ful, honorable,  productive  trade — in  which  class  land  specula- 
tors do  not  belong — to  say  if  the  lowering  of  Rent  robbery, 
the  safety  and  security  of  business,  the  increase  of  credit,  and 
the  increase  of  profit  would  not  result  in  general  prosperity 
to  the  whole  nation,  and  in  long  continued  prosperity,  un- 
disturbed by  the  terror  and  ruin  of  recurrent  panics. 

This  is  the  good  the  Common  Rate  has  to  offer  you 
men,  and  it  lies  in  your  own  choice  whether  to  accept  it  or 
to  reject  it. 


Personal  Talk  to  Business  Men 


T  the  risk  of  being  tedious,  I  want  to  drive  this 
question  of  rent  tribute  a  little  deeper  into  the 
minds  of  you  business  men.  To  tell  the  truth, 
you  are  the  class  hardest  to  teach  political  sense. 
I  dislike  to  say  so,  but  it  is  the  truth.  The  farmers  and 
mechanics  are  much  better  posted.  They  read  books  and 
publications  dealing  with  economic  laws  and  talk  these  things 
over  among  themselves  in  private  and  public  gatherings, 
while  the  extent  of  your  reading  is  usually  the  pages  of  a 
popular  magazine  and  the  news  columns  of  the  daily  papers 
—  an  immense  amount  of  amusing  chaff.  You  take  your 
political  and  economic  opinions  at  second-hand  from  men 
who  are  very  unfit  to  deal  intelligently  with  such  topics. 
This  is  not  flattering  to  you,  but  it  happens  to  be  the  fact. 
And  yet,  from  your  very  position  in  society  and  the  extent 
of  your  acquaintance  and  activities,  you  exercise  a  tremendous 
influence  on  the  social  fortunes  of  the  nation.  Your  lack 
of  even  rudimental  economic  knowledge  is  not  due  to  any 
lack  of  intellect  or  natural  parts.  Those  you  have  in  abun- 
dance, but  you  apply  them,  and  all  your  time,  to  the  daily 
problem  of  profit  and  loss,  and  so  narrow  your  field  of  in- 
formation. You  are  perfectly  bully  in  your  way  —  but  your 
way  is  not  broad.  It  nearly  always  runs  straight  from  bed 
to  Dollartown  and  back  to  bed.  I  fear  you  may  resent  this 
plain  speech,  because  I  know  you  think  you  are  shrewder 


1 20  A  BIT  OF  PLAIN  TALK 

and  wiser  than  you  are.  If  you  were  wise  and  shrewd  you 
would  not  be  straining  your  credit  and  employing  all  your 
capital  and  working  long  days  for  the  profit  of  another  lot 
of  chaps  who  do  nothing.  And  that  is  exactly  what  you  are 
doing  by  the  hundreds  of  thousands.  You  are  working  for 
the  gambler,  the  land  speculator,  the  fellow  who  collects 
ground  rents. 

It  may  be  not  amiss  to  say  that  here  and  elsewhere, 
when  using  the  term  Rent,  I  mean  always  and  strictly 
ground  rent.  The  part  of  the  rent  you  pay  which  is  collected 
by  the  building  you  are  in,  is  a  perfectly  fair  and  legitimate 
wage  of  the  useful  Capital  and  Labor  which  put  the  building 
there.  This  portion  of  the  rent  remains  stationary.  The 
portion  of  the  rent  you  pay  to  the  ground  the  building 
stands  on,  in  just  so  far  as  it  has  risen  above  its  first  value, 
is  the  portion  you  pay  to  idle  capital  and  speculation.  This 
is  the  rent  which  is  always  rising,  with  every  fresh  exertion 
on  your  part.  This  is  the  thing  that  gets  your  profit. 

Let  me  give  you  an  illustration  of  the  workings  of  idle 
capital  and  ground  rent  drawn  from  every  day  real  life. 
Not  long  ago  a  lot  was  bought  by  a  man  I  know  for  the  sum 
of  one  hundred  thousand  dollars.  He  bought  the  lot  of  a 
man  who  paid  five  hundred  dollars  for  it  twenty  years  before. 
The  lot  during  all  that  time  laid  unimproved.  The  new 
owner  expended  two  hundred  thousand  dollars  in  erecting 
a  building  to  be  let  to  business  men.  Quite  an  ordinary, 
usual  transaction,  you  see. 

Now  in  the  first  place,  in  considering  this  transaction, 
we  see  at  once  that  there  was  a  profit  in  the  hand  of  the 


A  BIT  OF  PLAIN  TALK  121 

first  lot  owner  of  $95,500,  less  the  tax  he  paid  during  oc- 
cupancy. Twenty  years  before  he  had  buried  five  hundred 
dollars  in  that  lot — buried  it  just  as  certainly  as  if  he  had 
tied  it  in  a  sack  and  hid  it  in  the  ground.  It  was  just  so 
much  capital  withdrawn  from  useful  work.  During  all 
those  twenty  years,  in  his  capacity  as  lot  owner  he  had  not 
done  one  single  thing  to  help  improve  his  city,  had 
neither  bought  nor  traded  nor  employed  labor  or  other 
capital.  It  so  happened  that  the  buyer,  to  get  the  purchase 
money  in  hand,  sold  industrial  securities  in  the  sum  of 
$100,000,  which  had  netted  for  a  long  period  about  5  per 
cent.  He  had  actively  employed  a  capital  of  $100,000  for 
twenty  years  in  useful,  generally  beneficial  work,  assisting 
labo>r  to  create  wealth  — the  honorable  enterprise  of  a  good 
citizen.  The  total  earnings  of  his  $100,000  capital  for 
twenty  years  were  taken  by  that  little  $500  buried  for  twenty 
years  in  the  unimproved  lot — an  idle  parasite.  That  is 
perfectly  clear,  is  it  not?  Well,  that's  when  speculative 
land  value  began  to  rob  industry. 

And  now  comes  in  the  business  man's  punishment.  Of 
course,  when  the  new  owner  had  expended  $200,000  in  build- 
ing, and  handed  over  $100,000  to  the  successful  real  estate 
gambler,  he  had  an  investment,  perfectly  legitimate  so  far 
as  he  was  concerned,  of  $300,000,  on  which  he  must  have 
profit.  Assuming  a  gross  rental  of  $30,000,  the  business  men 
renting  stores  and  offices  in  that  building  must  pay  $10,000 
annually,  or  33  1-3  per  cent  of  the  total  rent,  as  ground  rent. 
They  are  paying  back  to  the  new  owner  the  $100,000  which 
he  was  compelled  to  hand  over  to  the  idle  and  useless  land 


1 22  A  BIT  OF  PLAIN  TALK 

gambler.  The  rent  of  every  man  in  the  building  is  one- 
third  higher  on  that  account.  That  is  clear,  isn't  it  ? 

Now,  mark  again.  The  erection  of  that  building  stim- 
ulates business  in  the  locality.  Other  men  desire  to  erect 
buildings  and  there  is  a  more  imperative  demand  for  land  to 
build  upon.  Naturally,  land  prices  are  quick  to  rise  in  the 
neighborhood.  With  all  this  stimulus,  an  adjoining  lot  in 
five  years  sells  for  $200,000.  What  occurs?  The  owner  of 
the  $300,000  lot  and  building  now  values  it  at  $400,000, 
and  he  every  naturally  proceeds  to  raise  his  tenants'  rents 
until  he  has  a  gross  return  O'f  $40,000  annually.  Fifty  per 
cent  of  the  rent,  the  business  men  in  the  building  pay,  is 
now  paid  as  ground  rent.  The  actual  building  rent  remains 
stationary.  The  constant  rise  in  business  rents  is  due  solely 
to  the  constant  rise  in  ground  rents — and  with  every  fresh 
exertion  of  capital  and  labor  he  makes,  the  business  man 
helps  to  raise  his  own  rent — by  raising  the  speculative  value 
of  land.  Now,  was  I  wrong  in  saying  that  you  are  not 
nearly  the  shrewd,  wise  men  you  think  you  are? 

The  only  way  the  business  man  can  keep  even  with  the 
gambler  in  land  values  is  to  become  to  some  extent  a  gambler 
in  land  values  himself,  and  thus  the  capital  he  would  use  in 
useful  wealth-production  is  depleted  to-  the  damage  of  the 
whole  nation. 

Now,  then,  it  is  ground  rent  which  constantly  rises  and 
so  takes  the  profits  of  industry.  This  ability  of  ground  rent 
to  increase  its  demands  is  due  to  the  pressure  of  population 
on  certain  spots — to  the  forced  desire  of  too  many  men  to 
occupy  too  little  ground.  And  this  pressure  of  population 


A  BIT  OF  PLAIN  TALK  123 

arises  from  the  concentration  of  a  marginal  excess  of  popu- 
lation at  those  certain  spots  by  the  compelling  power  of 
transportation  rate  advantage. 

Speculative  land  values  are  not  excessively  high  because 
a  city  happens  to  be  large,  but  because  it  always  has  just  an 
excess  of  population.  It  is  the  margin,  just  as  in  business,  one 
man's  anxiety  to  reduce  a  surplus  stock  by  price-cutting, 
brings  down  everybody  else's  prices  till  the  surplus  is  sold. 
All  values  of  all  kinds  fluctuate  in  accordance  with  this 
marginal  law. 

Do  not  be  deceived  into  the  belief  that  the  only  tribute 
you  pay  to  ground  rent  is  the  sum  you  hand  over  monthly 
to  the  landlord's  agent.  If  that  were  all  you  could  take  care 
of  it.  But  ground  rent  gets  at  your  profits  in  a  hundred 
ways — in  increase  of  goods  cost,  in  increased  maintenance 
cost,  in  decrease  of  customers'  buying  power.  I  will  tell 
you  how  to  measure  your  individual  forced  tribute  to  ground 
rent  with  considerable  accuracy.  Set  down  how  much  stock 
you  could  buy  for  ten  thousand  dollars  five  years  ago.  Then 
set  down  how  much  you  could  buy  of  that  stock  for  ten 
thousand  dollars  at  present  prices.  The  difference  between 
the  buying  power  of  the  money  then  and  the  buying  power 
of  the  money  now  will  be  the  amount  you  have  paid,  in  one 
way  or  another  to  ground  rent,  on  every  ten  thousand  dollars 
of  your  capital  in  trade.  And  this  will  be  exclusive  of  what 
you  have  actually  paid  in  monthly  cash  rent  to  your  landlord. 
That  difference  represents  the  amount  ground  rent  has 
taken  from  you  indirectly.  Of  course,  you  have  got  a  great 
part  of  this  back  by  constantly  raising  the  price  of  your  goods, 


124  A  BIT  OF  PLAIN  TALK 

but  you  had  to  pay  part,  and  your  customers  had  to  pay 
the  rest — you  getting  less  net  profit  and  they  getting  less 
goods  for  their  money.  Your  customers  have  to  help  you 
pay  your  ground  rent  tax,  and  you  have  to  help  pay  the 
ground  rent  tax  of  every  one  you  buy  from  or  trade  with, 
wholesalers,  jobbers,  transportation  companies,  manufac- 
turers, fellow-retailers,  butchers,  bakers,  doctors  and  lawyers 
— ground  rent  gets  you  at  every  turn.  Now,  you  must  see 
that  is  so,  if  you  have  the  mental  capacity  to  reason  quite 
simply.  The  question  up  to  you  for  an  answer,  business 
men,  is,  do  you  want  this  state  of  things  to  continue?  Do 
you  want  to  keep  on  paying  this  tribute  in  increasing  amount 
as  long  as  you  live,  and  your  children  after  you? 

You  can  put  an  end  to  this  theft  of  your  profits,  to  this 
robbery  of  your  industry.  The  measure  of  the  thief's  power 
to  rob  is  the  speculative  value  put  on  his  land  by  a  marginal 
excess  of  population  at  certain  points,  which,  in  turn,  is  placed 
at  those  points  by  the  law  of  favorable  rates,  and  which 
would  be  automatically  dispersed  and  diffused  by  the  Com- 
mon Rate. 

Do  you  ask  if  the  adoption  of  the  Common  Rate  would 
not  create  a  great  disturbance  in  business  values,  bringing 
about  loss  to  many  merchants?  For  a  short  time,  yes.  But 
it  would  bring  compensating  gains  with  it.  And  if  it  did 
not,  is  it  not  better  to  suffer  one  spasm  of  depression  and 
loss  than  to  lose  day  and  night,  with  no  hope  of  relief,  until 
the  regular  panic  comes  around  to  ruin  all  business?  Would 
you  not  rather  undergo  a  short,  painful  operation,  than  to 


A  BIT  OF  PLAIN  TALK  125 

carry  about  with  you  a  cancer  eating  away  your  life  every 
hour? 

You  business  men  ought  to  be  ashamed,  intelligent  as 
you  naturally  are,  to  be  so  ignorant  of  economic  laws  as 
you  are,  to  know  so  little  as  you  do.  I  am  not  talking  to  you 
on  sentimental  grounds.  I  make  no  appeal  tx>  your  public 
spirit,  your  charity,  your  patriotism.  I'm  talking  the  prosaic 
language  of  dollars  and  cents.  I  am  trying  to  enlist  your 
attention  to  what  is  happening  to  your  cash  registers  and  bank 
balances.  Surely  that  topic  ought  to  be  worth  some  mental 
exertion  on  your  part.  It  does  seem  almost  hopeless  to  talk 
to  men  who  complacently  agree  to  being  robbed  by  such 
monstrous  absurdities  as  protective  tariffs,  for  instance.  But 
I  know  you  have  sense  enough  to  see  things  right  if  you  will 
only  take  the  trouble  to  use  your  eyes  in  looking  around 
you. 


The  Wage  -Workers'  Stake  in  the 
Common  Rate 

|LL  that  I  have  said  in  this  argument  for  the  Com- 
mon Rate  must  appeal  to  the  common  sense  of 
you  men  and  women  who  sell  your  labor  for  wages. 
Upon  your  shoulders  falls  the  ultimate  heaviest 
burden  of  the  ground  rent  toll.  In  proportion  to  your  in- 
comes, you  are  by  far  the  largest  consumers  of  market  stuffs. 
And  every  time  your  slender  purses  are  opened,  ground  rent 
takes  a  penny  here  and  a  nickel  there,  and  strips  you  of  the 
net  profit  of  your  wage.  You  must  be  allowed  to  subsist, 
that  you  may  be  strong  to  work  well,  and  it  is  only  at  this 
subsistence  limit  that  ground  rent  robbery  ceases. 

The  half-baked  economists  of  the  cracker  box  and  street 
corner  stand  tell  you  that  Capital  robs  you  of  your  wages. 
This  is  the  talk  of  a  fool  who  cannot  distinguish  the  dif- 
ference between  Capital  and  Privilege.  Capital  is  robbed  just 
as  fast  as  you  are,  and  the  worst  that  can  be  said  for  it  is  that 
it  tries  to,  and  sometimes  does,  shift  the  greatest  activity  of 
the  common  burglar  in  your  direction.  But  the  common 
burglar  always  comes  back  and  gets  at  Capital's  profits,  too. 

Ground  rent  does  not  cut  the  amount  of  your  wages 
down.  That  would  be  too  coarse  a  method  for  such  an 
accomplished  thief.  It  simply  increases  the  cost  of  every- 
thing you  buy.  Your  wages  is  the  part  of  the  joint  product 
which  you  get  in  the  division  of  product  between  Labor 
and  Capital,  and  as  ground  rent  pays  not  a  cent  of  this,  and 
means  to  rob  both  producers,  it  cares  not  at  all  whether  you 


128  THE  WORKERS'  STAKE 

get  high  wages  or  not.  Whether  Capital  takes  the  lion's 
share  or  Labor  gets  it,  makes  no  difference  to  the  thief  who 
can,  and  will  steal  from  both  impartially. 

Let  me  tell  you  where  your  wages  go,  and  what  makes 
the  rent  of  your  poor  rooms  higher  and  the  cost  of  coal, 
flour,  clothes  and  all  necessities  higher  and  higher  every 
year.  You  ask  the  boss  at  the  factory  or  the  store  or  the 
office  where  you  work,  how  much  more  the  land  the  building 
stands  on  is  worth  this  year  than  it  was  one,  two,  or  five 
years  ago>.  Subtract  the  former  value  from  the  present  and 
you  will  see  just  where  your  wages  go.  The  land  has  pro- 
duced nothing —  not  even  a  potato — yet  the  owner  has  reaped 
thousands  of  dollars  from  it.  Somebody  had  to  earn  those 
dollars  and  pay  them  to  him.  In  this  case,  your  name  is 
Somebody.  You  and  your  fellows  all  belong  to  the  Some- 
body family.  Can  you  see  this?  It's  as  plain  as  a  pikestaff, 
if  you  look  steadily.  The  more  your  wages,  reckoned  in 
money,  the  more  ground  rent  you  pay.  For  you  naturally 
increase  your  wants  and  your  purchases  as  you  have  more  to 
spend,  and  every  purchase  pays  toll  to  ground  rent.  It  is 
everywhere  and  always  busy.  It  takes  toll  out  of  the  baby's 
milk-bottle  and  out  of  the  cost  of  the  grandfather's  coffin. 
It  robs  the  cradle,  the  home,  and  the  grave  with  an  impartial 
and  unerring  hand. 

Now  if  you  wage  workers  would  vote  in  the  Common 
Rate  you  would  vote  away  the  power  of  this  thief  of  labor's 
wage.  The  wages  you  get  would  buy  you  more  necessities 
and  more  comforts  and  they  would  rise  in  amount.  The 
enormous  wealth  you  now  make  and  turn  over  to  land 


THE  WORKERS   STAKE  I2Q 

speculators  would  remain  in  your  own  hands  to  use  or  ex- 
change. With  every  tumble  in  the  extravagant  values  of 
city  lots,  your  chance  to  buy  a  lot  and  a  home  would  come 
nearer  and  just  that  much  money  would  stick  in  your  posses- 
sion to  be  applied  to  the  purchase. 

Men  and  women,  fellow-workers,  I  speak  to  you  the 
words  of  soberness  and  truth.  The  apparently  simple  thing 
I  propose  to  you  will  bring  you  a  thousand  fold  more  than 
all  your  organizations  can  possibly  bring  you — and  your  or- 
ganizations have  done  much — very  much  for  you.  But  the 
utmost  your  organizations  can  do  is  to  force  a  fair  division 
between  you  and  Capital.  They  cannot  lay  a  straw  in  the 
way  of  ground  rent,  coming  to  rob  you  after  the  division 
between  you  and  Capital  has  been  made. 

I  am  not  going  to  talk  to  you  the  common  street  patter 
about  hunger,  nakedness  and  want,  because  I  am  talking  to 
American  workingmen  and  workingwomen  and  very  few  of 
them  are  either  hungry,  naked  or  wretched.  On  the  con- 
trary, I  know  of  no  more  inspiring  sight  than  to  rise  of  a 
morning  and  see  the  great  army  of  labor  marching  through 
the  streets  to  the  day's  work,  battalion  after  battalion  of 
fine,  hearty,  intelligent  fellows,  regiment  after  regiment  of 
women  and  girls,  well-dressed,  well-fed,  hundreds  upon 
hundreds  of  them  bright  enough  and  sensible  enough  to  fill 
any  position  in  life,  from  the  White  House  to  the  glove- 
counter.  It  is  just  because  our  workingwomen  and  work- 
ingmen are  such  a  superior  class  that  they  should  have  and 
should  insist  on  having  all  that  their  highly  skilled  and 
intelligent,  efficient  labor  adds  to  the  common  wealth.  Better 


I3O  THE  WORKERS   STAKE 

clothes,  better  furniture,  more  books,  theaters,  balls,  en- 
joyments and  luxuries — these  are  their  just  rights.  I  do  not 
appeal  to  them  to  ask  for  bread.  I  want  them  to  have  cake, 
and  plenty  of  it. 

My  ideal  of  an  American  workingman  and  working- 
woman  is  not  the  type  of  the  thrifty  French  peasant,  setting 
aside  todays's  soup-meat  for  tomorrow's  dinner,  but  a  man 
and  woman  producing  in  an  hour  of  superior  labor  more  than 
the  French  peasant  saves  in  a  week,  and  spending  the  wealth 
so  produced  for  all  the  comforts  and  luxuries  of  life  obtain- 
able. We  can  live  but  once  here  on  earth,  and  the  proper 
way  to  live  is  the  happiest  way  possible  to  any  of  us.  Wealth 
in  use  is  the  only  wealth  doing  any  good.  More  consumption 
induces  more  productfon,  and  so  the  wheel  of '  trade  and 
fortune  goes  merrily  around.  He  who  spends  freely  within 
his  means,  and  lives  in  the  most  comfort  to  himself  and 
family,  performs  the  part  of  a  sensible  fellow  and  a  good 
citizen,  and  is  acting  in  accordance  with  the  soundest  econ- 
omic law.  Instead  of  curtailing  spending  and  having,  the 
true  aim  of  a  wise  people  is  to  increase  their  ability  to  pro- 
duce and  to  spend  and  to  have.  There  are  foolish  books 
written  to  prove  that  a  man  can  exist  on  twenty  cents  a  day. 
The  camel  can  also  go  seven  days  without  a  drink.  But 
who  wants  to  be  a  camel  ? 

Our  present  system  of  political  thought  is  protection  and 
paternalism  run  mad.  We  must  not  be  permitted  to  hear 
naughty  words,  or  to  pass  a  brewery  door,  or  to  read  things 
unfit  for  childish  ears.  Instead  of  breeding  robust  men  and 
women,  unafraid  amidst  temptation  and  innocent  with  wis- 


THE  WORKERS   STAKE  13 1 

dom,  we  are  to  breed  a  race  of  mollycoddles,  who  are  never 
to  see  anything  to  tempt  their  feeble  virtue.  In  trade,  the 
same  foolish  politics  prevails.  We  must  not  let  the  English- 
man or  Frenchman  or  German  come  inside  the  walls  to  buy 
and  sell.  Instead  of  meeting  the  strangers  like  men,  and 
being  taught  by  necessity  to  beat  them  at  every  stage  of  the 
game,  the  government  must  shield  our  manufacturers  from 
these  rude  and  terrible  fellows'  attacks — incidentally  charg- 
ing the  police  costs  to  the  rest  of  us.  In  domestic  affairs, 
in  the  matter  of  profits  and  wages,  we  must  leave  things  as 
they  are  for  fear  something  might  come  out  of  the  dark  and 
get  us  if  we  tried  new  plans.  That  is  the  essence  of  the 
political  wisdom  you  wage-workers  have  expounded  to  you 
daily  and* hourly  by  solemn  jackasses  in  Congress  and  out. 

Now,  I  appeal  to  you  workers  to  have  done  with  this 
folly.  Let  us  stand  up  like  men  and  women  of  good  courage, 
and  look  our  problems  in  the  eye,  and  grapple  with  them. 
Let  us  look  this  scandalous  robber,  Ground  Rent,  in  the  face 
and  hit  it.  Let  us  fight  for  our  own  hand,  vote  for  our  own 
good,  take  what  is  our  own,  and  spend  it  as  we  please, 
and  in  so  doing,  we  shall  find  that  not  only  we,  but  all  our 
fellows  in  our  dear  country  shall  rise  to  higher  planes  of 
living,  to  higher  planes  of  thought,  to  higher  planes  of 
strength  and  courage  and  happiness,  to  higher  planes  of  man- 
hood and  womanhood. 

To  you,  workmen,  to  you,  workwomen,  to  you,  to  you, 
the  Common  Rate  with  its  common  justice  and  common  op- 
portunity, means  emphatically  the  splendid  dawn  and  the 
bright  day  of  the  Common  Good ! 


The  Conclusion  of  the  Whole  Matter 

far  as  this  little  book  is  concerned,  my  work  is 
done.  The  task  is  finished.  The  appeal  is  made. 
It  has  been  a  labor  of  love  and  I  have  faith  to 
believe  it  will  bear  fruit. 
It  has  been  now  nearly  four  years  since  this  truth  I 
have  anxiously  tried  to  set  forth  clearly,  first  dawned  upon 
me.  Since  then  I  have  read  much  and  observed  and  medi- 
tated more,  and  this  meditation  and  observation  and  study 
have  but  served  to  ripen  conjecture  into  firm  conviction.  The 
theory  of  the  Common  Rate  is  the  theory  of  Common  Justice. 
It  is  the  Square  Deal.  It  is  neither  a  makeshift  nor  a  tem- 
porary palliative  of  economic  trouble.  It  is  a  radical,  per- 
manent, powerful  force  for  good.  With  one  hand  it  strikes 
down  greed  and  with  the  other  it  lifts  up  industry.  It  offers 
interest  to  useful  Capital,  and  wages  to  useful  Labor,  and 
bids  Privilege  keep  hands  off.  It  is  the  friend  of  all  who  do 
their  part  in  the  business  of  producing  the  world's  necessities 
and  comforts,  and  the  foe  of  all  who  fatten  by  speculating 
on  the  profits  of  better  men's  exertions. 

The  life  of  one  human  being  is  a  small  thing,  and 
whether  it  be  happy  or  wretched  cannot  be  a  matter  of  con- 
cern to  many.  But  the  long,  sequent  life  of  humanity  is  a 
very  great  and  wonderful  thing,  and  all  that  goes  to  make 
it  happy  or  wretched  is  of  concern  to  each  individual.  The 
economic  sins  of  the  fathers  are  visited  unerringly  upon  the 


134  THE  CONCLUSION  OF  THE  MATTER 

children,  and  the  economic  righteousness  of  the  fathers, 
equally  brings  good  gifts  to  those  who  live  after.  The  great 
thinkers  and  the  great  writers  have  always  been  prone  to 
exalt  the  mystical  and  intellectual,  and  give  small  heed  to 
the  homely  and  practical  things  of  life.  Yet  to  me,  the 
genius  and  sense  of  Bacon  are  as  admirably  exhibited  in 
stuffing  a  dead  chicken  with  snow  as  in  the  composition  of 
one  of  those  incomparable  Essays.  It  is  a  fine  and  useful 
thing  to  write  a  living  poem  or  a  beautiful  tale,  but  I  can 
see  fineness  and  usefulness  of  effort  in  the  invention  of  a 
bread -mixer  that  saves  weary  hours  of  toil  to  tired  women, 
or  in  the  skill  that  turns  the  waters  of  a  mountain  stream 
upon  the  desert  lands.  If  beauty  has  its  use,  so  use  has  its 
beauty. 

Therefore,  I  make  no  apology  for  earnestness  of  speech 
in  presenting  the  homely  and  commonplace  topic  of  a  freight 
rate.  For  from  that  homely  and  common  root,  hidden  in 
the  common  ground,  spring  the  trunk  and  branches  of  our 
varied  and  wonderful  social  life.  The  happiness  of  many 
millions  living  and  many,  many  millions  to  be  born,  is  no 
light  topic,  and  the  pen  was  never  yet  pointed  which  could 
invest  such  a  subject  with  too  much  earnestness  of  phrase 
and  diction. 

And  so,  little  book,  fare  forth  on  your  errand ! 


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